Alimony is deductible by the payer and reportable as income to the recipient. But it can also provide more deductions for the payer.
For instance, under the terms of a divorce, a taxpayer is required to make the payments on his former spouse’s car, health insurance premiums, and the mortgage and property taxes on their jointly owned home. The former spouse resides in the home. Do you think any of these payments qualify as deductible alimony payments?
Most definitely, yes. The payments he makes for the care and the health insurance premiums qualify as deductible alimony, even if they are paid directly to the bank and the insurance company.
One-half of the interest on the mortgage payments he makes for the joinly owned home qualifies as alimony; the other half is deductible on his Schedule A.
None of the real estate taxes he pays is deductible as alimony; however the entire amount is deductible on his Schedule A.
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