I didn't want to disrupt the Legal Fee thread with this.
Jeff-Ohio posted this:
Generally, attorney's fees and other costs paid in connection with a divorce, separation, or decree for support are not deductible by either the husband or the wife. However, the part of an attorney's fee and the part of the other costs paid in connection with a divorce, legal separation, written separation agreement, or a decree for support, which are properly attributable to the production or collection of amounts includible in gross income under section 71 are deductible by the wife under section 212.
My question is, if the alimony/spousal support is only temporary for less than a year until the support is finalized, does this deduction still come into play? Client received $12,500 from his soon to be ex-wife.
The IRS Website has this to say: https://www.irs.com/articles/tax-deductions-for-divorce-related-fees
Alimony-Related Legal Fees
You cannot deduct the costs of counseling, litigations, or personal advice. However, in some circumstances, taxpayers are permitted to deduct fees that are associated with the collection of alimony payments.
Divorce-related fees may be deductible by the party seeking taxable income (such as property or alimony). In other words, a spouse (the wife, in most cases) may deduct a portion of the legal fees incurred while disputing her alimony rights. This would be claimed as a “Miscellaneous Itemized Deduction” on Form 1040 Schedule A.
This deduction is allowed because alimony is considered taxable income to the payee. Although there are some restrictions on this divorce advice, including the following:
The alimony, in any one year, must exceed 2% of the spouse’s AGI (adjusted gross income) ― referring to the spouse seeking alimony.
If the attorney’s services include tax counseling, they must prepare separate bills for deductible charges and non-deductible charges. (Remember that fees for counseling and advice cannot be deducted.)