payment made to buy out spousal interest

[Naveen Mohan from New York]

One of my client is going through divorce. He paid his ex-wife $ 10,000.00 by check to buy out her interest in their jointly owned primary house. He is also paying his ex wife alimony payment.

His lawyer told him that since he paid cash to buy out his wife's interest, he can add it to his alimony payment.

I cannot find anything to support the lawyer position.

Is his lawyer right?

Thanks for your help.

Naveen mohan

[Jack from Ohio]

The only amounts that can be claimed as alimony are the amounts specifically designated in the divorce decree. Period!

We had a client that reported larger amounts to us for several years on his attorney's advice. IRS asked for the decree and disallowed any amounts above what was specifically spelled out in the decree.

Most lawyers are clueless about tax law.

Do not follow the attorney's advice. IRS sees it differently.

[jasdlm]

I agree with Jack, but make sure you get a copy of the property settlement agreement and see what language was actually used regarding the $10,000. I don't ever trust what clients tell me when they are interpreting legal documents.