Recommended Book: Tax Aspects of Divorce: The book has proven to be invaluable to people experiencing divorce or separation. It is a thorough reference for every Internal Revenue Code Section that is likely to be encountered in the divorce process.

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Taxes & Divorce: Marriage Obligations and Debts as Alimony:

Payment of debts of one spouse by the other are payments made on behalf of the payee spouse to a third party if paid pursuant to the terms of a divorce or separation agreement (Temp. Reg. Sec. 1.71-1T Q&A 6). These would qualify under Section 71(b)(1)(A) as alimony (assuming all the requirements are met). It can be a very difficult to structure the payments to qualify.

It would appear that the temporary regulations had in mind future debts of one spouse such as living expenses rather than those marital debts assumed at the time of the divorce. One of the requirements for payments to be alimony is that there must be no obligation to make any payments after the death of the payee spouse. If even one payment is required, then none of the payments are alimony (Temp Reg. §1.71- 1T(b) Q&A 13). If one spouse unconditionally promises to pay a marital debt or obligation of the other spouse, the payment is a property settlement, not alimony.

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Divorce Tip: # 31 All divorce agreements should have clear provisions in regards to the education of the child(ren). Often times college tuition or support through college is neglected! Sponsored by: Pension Appraisers, Inc.

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