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Court says unallocated support payments are alimony.

Publication: Journal of Accountancy
Publication Date: 01-NOV-03 		Format: Online - approximately 966 words
Delivery: Immediate Online Access
Full Article Title: Court says unallocated support payments are alimony.(Tax Court memo)

Article Excerpt
Generally, whether a payment is alimony depends on IRC section 71(b). Alimony and separate maintenance payments (collectively referred to as alimony) are taxable to the recipient and deductible by the payor. When a taxpayer makes support payments under a court order issued pending a divorce, the parties may specify the amount of alimony in a separation agreement.

If neither a divorce decree nor a separation agreement exists, payments made under court orders that don't specifically allocate a portion of the amount as alimony or child support but rather as household maintenance may be deemed alimony if they meet the requirements in section 71(b)(1).

Section 71(b)(1) defines "alimony or separate maintenance payment" as any payment in cash if

(A) Such payment is received by (or on behalf of) a spouse under a divorce or separation instrument.

(B) The divorce or separation instrument does not...

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