Tax Tip of the Week*

PAYING ALIMONY TO OTHERS

Most of the time, alimony is paid directly to the ex-spouse, even if it means going through a probation department. However, payments to third parties on behalf of the ex-spouse can also be considered and treated as alimony. For instance, paying the rent on the ex-spouse’s apartment, or paying for an auto lease – these can be considered as deductible alimony to the payor and taxable to the recipient. In order for that to be the case, the obligation to make those payments must be explicitly stated in writing. By the way, paying the mortgage on jointly owned property does not qualify as alimony because, from a tax point of view, you are merely paying your own existing liability (i.e. your mortgage).