J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

Chapter 37

Planning Alimony and Marital Settlements

Alimony payments that meet tax law tests in this chapter are deductible if you pay them, and taxable if you receive them. Payments are not deductible by the payer unless taxable to the recipient.

You claim a deduction for deductible alimony that you pay on Line 31a of Form 1040. You deduct the payments even if you claim the standard deduction rather than itemizing deductions. You must enter the Social Security number of your ex-spouse. Otherwise, your deduction may be disallowed and you may have to pay a $50 penalty. If you pay deductible alimony to more than one ex-spouse, enter the Social Security number of one of them and provide similar information for the others on a separate statement attached to your return.

If you receive taxable alimony, report the payments on Line 11 of Form 1040. You must give your ex-spouse your Social Security number and could be subject to a $50 penalty if you fail to do so.

Transfers of property between spouses during marriage, as well as transfers incident to divorce, are generally treated as tax-free exchanges. The transferor-spouse does not realize gain or loss and the transferee takes the transferor’s basis in the property (6.7).

37.1 Planning Alimony Agreements

37.2 Decree or Agreement Required

37.3 Cash Payments Required

37.4 Payments Must Stop at Death

37.5 Child Support Payments Are Not Alimony

37.6 No Minimum Payment Period for Alimony

37.7 3rd Year Recapture If Alimony Drops by More ...