Lump sum payment from separation agreement tax deductible?

[jodost]

I am preparing my taxes, and was wondering if I can deduct the $6,000 below. I know it's not taxable income for Ex-wife, but was wondering if I can deduct it on my taxes.

Article II

PROPERTY DIVISION

G. Tax-Free Lump Sump Payment. Upon the acceptance of this Agreement by the Court, the
Husband shall pay to the Wife a tax-free lump sum payment of $6,000, representing the amounts she paid for improvements on the Condo.

 

[irish223]

I am preparing my taxes, and was wondering if I can deduct the $6,000 below. I know it's not taxable income for Ex-wife, but was wondering if I can deduct it on my taxes.

Article II

PROPERTY DIVISION

G. Tax-Free Lump Sump Payment. Upon the acceptance of this Agreement by the Court, the
Husband shall pay to the Wife a tax-free lump sum payment of $6,000, representing the amounts she paid for improvements on the Condo.

I'm no tax expert, but I don't believe you can deduct it. It seems to be part of your property settlement, not alimony or spousal support.

Stay tuned for more replies.

 

[army judge]

I am preparing my taxes, and was wondering if I can deduct the $6,000 below. I know it's not taxable income for Ex-wife, but was wondering if I can deduct it on my taxes.

Article II

PROPERTY DIVISION

G. Tax-Free Lump Sump Payment. Upon the acceptance of this Agreement by the Court, the
Husband shall pay to the Wife a tax-free lump sum payment of $6,000, representing the amounts she paid for improvements on the Condo.

Not only isn't it deductible, but you'll have to gross the $6,000 up!

You probably want to speak with your accountant or tax attorney about this, before you do anything else!

That $6,000 payment could approximate $7,200-7,500 when all is said and done.

Nevertheless, it'll be north of $6,500 for sure.

The $6,000 payment also has state tax ramifications.

There were better ways to settle this, but we're not talking about $600,000.