(Closed) Tax Help! Any CPAs?

posted 5 years ago in Legal
Post # 4
Member
7315 posts
Busy Beekeeper

I am not a CPA or a lawyer, so can say nothing about the legality, but if I were in your position, I would give him whatever extra refund I got based on the taxes. The idea is, you’re getting back a small portion of the taxes you paid, but you didn’t pay those taxes. He did. He can’t claim it because of how the paperwork is set up, but he DID pay those taxes. Right?

Post # 5
Member
6124 posts
Bee Keeper
  • Wedding: August 2012

Was the house acquired during your marriage or before?  Is your state a 50/50 no fault state?

There was no agreement spoken about how to handle his contributions to the house payment/taxes in the decree?

I don’t think he has any validity in that he can claim alimony expenses or all the interest!  The 1098 is not even in his name; I don’t think someone else can claim them.

Maybe reimburse him the value of the taxes he paid for those months?  Or give him cash for half the year’s taxes?  Call it good and done.  That’s probably of more value than trying to claim all the taxes for his tax return. HOw does even one caluclate the refund if you used taxes as itemizations?  It’s like 27 cents to the dollar?

I don’t think he can call this alimony either!

If you used a laywers for the divorce, then I’d consult them too.  Normally how to do the taxes gets spelled out in the decree – well it did for us.  It said exactly how we were to file and all that.

Post # 6
Member
28 posts
Newbee
  • Wedding: May 2013

Hi! I am a CPA, but I have only been practicing for 2 years (I’m 25 years old) and have not dealt with many divorce issues yet so I will try my best to help.  I have 2 questions:

1.  Did your divorce/separation instrument specifically state that these payments were not deductible as alimony?

2.  Do you and your former spouse usualy take the standard deduction (5,950 in 2012) or itemize your deductions on schedule A?

 

 

Post # 7
Member
28 posts
Newbee
  • Wedding: May 2013

Okay, actually I just came across something that might help determine the tax treatment of your situation.  Unfortunately, unless these mortgage payments were speciifically designated as not being alimony in the divorce decree – I don’t think it was the answer you were looking for. I found the following 2 paragraphs on page 13 of IRS Publication 504, Divorced or Separated Individuals:

Payments to a third party. Cash payments, checks, or money orders to a third party on behalf of your spouse un- der the terms of your divorce or separation instrument can be alimony, if they otherwise qualify. These include payments for your spouse’s medical expenses, housing costs (rent, utilities, etc.), taxes, tuition, etc. The payments are treated as received by your spouse and then paid to the third party.

Example 2. Under your separation agreement, you must pay the real estate taxes, mortgage payments, and insurance premiums on a home owned by your spouse. If they otherwise qualify, you can deduct the payments as alimony on your return, and your spouse must report them as alimony received. If itemizing deductions, your spouse can deduct the real estate taxes and, if the home is a qualified home, also include the interest on the mortgage in figuring deductible interest. However, if you owned the home, see the example under Payments not alimony, earlier. If you owned the home jointly with your spouse, see Table 4.

 

I’m really sorry – I was hoping my research would result in an answer that was beneficial to you and not him!  I would recommend you read http://www.irs.gov/pub/irs-pdf/p504.pdf and http://www.irs.gov/publications/p936/index.html

 If you are not currently using a CPA to prepare your taxes, the IRS does have a hotline 1-800-829-1040 that you can call.  However, if you do decide to call I would prepare to be on hold for quite some time – because they are usually slow over there.  I don’t usually have much to contribute on these boards, but I enjoy reading others posts.  I thought I would chime in on this one since its what I do. Please let me know if there is anything else I could possibly help with.

Post # 8
Member
145 posts
Blushing bee
  • Wedding: March 2016 - Mexico

I think IndyCPA is right. Unless your divorce decree specifically states that the mortgage payments your ex would be making on your property were not to be treated as alimony, it appears that they do meet the alimony criteria that IndyCPA referenced.

Post # 10
Member
28 posts
Newbee
  • Wedding: May 2013

@ineedtaxhelp:  

 

There are certainly quite a few variables in your situation which could affect the tax treatment of the mortgage interest paid.  Without actually seeing the divorce decree (or knowing more about divorce law), I afraid I cannot give a definitive answer.  You do have a couple of options here though.  Let him claim the mortgage interest payments as alimony on his return while you either claim the same amount as alimony income and deduct the mortgage interest on your Schedule A or do not report them and run the risk of being audited  (you may not actually be audited, but probably would receive a notice from the IRS).  You could also seek the legal advice of your divorce attorney to get some clarification or have your return prepared by a CPA this year.   Since he seems like he is being a jerk – I personally wouldn’t want him to get any benefit from the payments if possible and would probably spend the money to seek professional advice in order to try my best to make sure he wouldn’t get a dime- but that is just me haha.  Another option would be for you to just let him deduct the interest on his Schedule A as long as he agrees not to report it as alimony payments and be done with it.  If you choose to do this, I would not take the deduction on your schedule A.  If you decide to let him take the Sch. A deduction, then the audit/risk of receiving a notice would fall solely on him.  The good news is that you will not have to deal with any of this next year!  I hope you figure everything out!

Post # 11
Member
7315 posts
Busy Beekeeper

@IndyCPA:  I don’t understand how the guy is being a jerk. He only started playing hardball, with the alimony thing, after she made it clear that she wasn’t going to do the right thing on her own. He PAID the interest, so why shouldn’t he get the tax benefit? That’s all he asked for, and the OP’s response was: “I said no that I would not do that. That he lived in my home and essentially paid me rent to live there.” So… is she claiming that rent as income? I’m guessing not. I don’t think that’s right. I understand that he can’t legally claim it, but there’s nothing stopping her from standing up and saying “he paid it, so it should go back to him.” We had a similar situation with some dependents that we had custody of for 9 months of a year. We were the ones who could legally claim them, but we willingly gave the other party 25% of the credit we received for them since they had cared for them the other 3 months. It seems wrong to me to keep the benefit when you did not lay out the cost. 

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