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SEHI

Technical topics regarding tax preparation.
#1
Bob A  
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During 2018, tp paid health insurance premiums (policy is in the name of the non-working husband) for the husband, as court ordered by a Temporary Mediation Agreement. The couple has since divorced, late 2018. The tp was/is self employed (sched c). Can the tp deduct the health insurance premiums as sehi on her 2018 1040 filing, which she paid on behalf of her husband, for the period of 2018 during which time they were married?
 

#2
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Were they living together during 2018? Sounds more like alimony.

https://www.irs.gov/publications/p504#en_US_2018_publink100038175

Payments to a third party.

Cash payments, checks, or money orders to a third party on behalf of your spouse under 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 1.

Under your divorce decree, you must pay your former spouse's medical and dental expenses. If the payments otherwise qualify, you can deduct them as alimony on your return. Your former spouse must report them as alimony received and can include them in figuring deductible medical expenses.
 

#3
Bob A  
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Not living together, no and not divorced at the time.
 

#4
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The insurance plan must be established under your business. Your personal services must have been a material income-producing factor in the business. If you are filing Schedule C, C-EZ, or F, the policy can be either in your name or in the name of the business.

https://taxmap.irs.gov/taxmap/instr/i10 ... nk10002107
 

#5
Bob A  
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good one basisschedule, ty
 

#6
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So the policy is in the name of the ex-spouse (not the taxpayer or the taxpayer's business), who did not live with the taxpayer during 2018, and the taxpayer made the payments to the insurance company under the terms of a separation agreement.

Still sounds like alimony to me.
 

#7
Bob A  
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agree, alimony, ty
 

#8
Doug M  
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I disagree. It is not alimony. As per the §71, (before it was repealed) there was a requirement to be made under a written divorce or separation agreement. All you have is an agreement to split expenses while you are still married.

I still find it hard to follow the logic of "policy must be in the name of the individual or business" when Medicare premiums qualify.
 

#9
sjrcpa  
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What about
Bob A wrote:paid health insurance premiums (policy is in the name of the non-working husband) for the husband, as court ordered by a Temporary Mediation Agreement
 

#10
Doug M  
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It meets all the requirements (as long as it is not pre tax to the spouse) for SEHI as a sole prop.

We can deduct health insurance in the name of the spouse.
 

#11
Doug M  
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The insurance plan must be established under your business.


This is very arguable. A very sage contributor to TA (Riley) argues that the "plan" is the plan of the business, not the insurance policy plan.

The business plan is to provide health insurance to the owner and all eligible employees.
 

#12
Bob A  
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so, my hang-up was/is: although tp paid the health ins for the spouse, as ordered...… they divorced before the year was out and filed as single individuals. tp filed her profitable schedule c, reporting her health insurance (and children) as sehi … there is court ordered alimony, now the tp was ordered to pay spouse health insurance and she did, and for most of the year, as they were married for most of the year, his health ins strikes me as additional alimony paid by the tp, since it was for court ordered health insurance and they weren't married as of year end... otoh tp reports all the health ins she pays as sehi, her ins is in her name, not in the name of her sole prop business..... his insurance was in his name, she paid it as a self employed tp. (headache)
 

#13
Doug M  
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Look at old §71.

Maybe the shoe fits if this mediated cost sharing agreement is considered a "decree". Time to call the attorney.

See IRC 71(b)(2)(C)

https://codes.findlaw.com/us/title-26-i ... ct-71.html

I personally would be more comfortable with SEHI instead of alimony, especially since the husband would not have included the insurance in alimony income.

Was the taxpayer required to make other required payments besides the health insurance?
 

#14
Doug M  
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A quick search tells me that a temporary mediation agreement is unenforceable.
Last edited by Doug M on 13-Sep-2019 5:38pm, edited 1 time in total.
 

#15
Bob A  
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Now, on the sehi issue ….. would it "count" as sehi or any health insurance for that matter (even sched A) given they were divorced, didn't file together in 2018? I wonder if one can even claim health ins as health ins, for an individual they don't file jointly with?
 

#16
Doug M  
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I would include the months prior to divorce. You say "late 2018" was divorce date. Assume they divorced in November, I would include SEHI thru November.
 

#17
Bob A  
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Thank you Doug and all for your time and input... I appreciate you all.
 


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