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Discussion Forum Index --> Tax Questions --> Alimony or something else?
RidenourEA (talk|edits) said:
| 12 March 2007
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| I have a client who was supposed to receive alimony for the past 6 years. She didnt receive any of it, so she got a judgement against his property. She did not want to be the one to remove him from the property, so she sold the judgement for $97,000. Would this be some sort of property sale or alimony? I know alimony is usually consistant monthly payments, so if it is alimony, is it all reportable in 2006? She had to pay property taxes to keep the property from being seized and she also had substantial attorney fees. Is there anything I can do with that?
Comments are greatly appreciated!
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Riley2 (talk|edits) said:
| 13 March 2007
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| Need to go back to the original instrument that created the cause of action for the judgment. If that instrument did not speak to the nondeductibility or or nontaxability of the payments, and there is no possibility that the original obligation would survive the death of the payee spouse, the amount of the arrearage would be alimony.
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RidenourEA (talk|edits) said:
| 13 March 2007
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| If the $97,000 is alimony, I should be able to deduct the attorney fees as a misc itemized deduction. What about the $9800 in property tax? If a "buyer" pays delinquent taxes for an earlier year, the "buyer" must add the taxes paid to basis. In this case - no buyer and no basis. Is it possible to deduct anywhere?
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Taxea (talk|edits) said:
| 15 March 2007
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| You can only deduct the portion of the attorney fee that addressed the income issue. The attorney should be able to provide your client with a detailed invoice so you will know how much is deductible.
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