781.708.4445

wmlevine@levinedisputeresolution.com

Divorce Mediation Blog

The Goose, the Gander and the TCJA

Wednesday, February 20, 2019

Levine Dispute Resolution - Alimony

We know that under the federal Tax Cuts and Jobs Act of 2017 (TCJA) alimony instruments executed before December 31, 2018 will carry over deductibility when modified thereafter so long as the parties (or the court?) don’t opt out of that treatment. While we all hope that we can successfully maintain this important tax leverage for the sake of restructured families by incorporating existing temporary (interlocutory) orders into 2019-and-later agreements, a question (among many) that continues to nag is, just how malleable is this rule?

It seems clear that if one modifies former Spouse A’s alimony by reducing the sum or increasing it, deductibility remains intact.

I also assume that if we change former Spouse A’s alimony from an expressed sum to a formula, in whole or in part (i.e., $5000 per month to .325 of gross pay, or $5,000 per month to $4,000 per month plus .325 of future bonuses) deductibility is not jeopardized.

And, if former Spouse A’s alimony durational term is reduced or extended, there seems to be no reason why the opt out rule should not apply.

But, here is the payoff question:

    What if former Spouse A loses her job, former Spouse B’s career has taken off, and the modification shifts the payment obligation from A to B, is deductibility still available for this new obligation?

If this sounds a bit familiar, we wondered in an earlier blog entry if the durational limits of the Massachusetts Alimony Reform Act (eff. 3.1.12) apply to one spouse, or to both when they trade alimony places. As in, if the presumed duration is 7 years, and halfway through, the alimony obligation shifts, does the clock re-set, or does the second payor get credit for the former payor’s time served?

In an era of 2 partner family income predominance, this is not a far-fetched scenario — and now we have to worry about deductibility, too.

What do you think?



Get e-mail notifications of new blog posts! Enter email address below.:



Delivered by FeedBurner

other articles


recent posts


tags

divorce arbitration Same Sex Marriage alimony reform legislation The Seven Sins of Alimony divorced Levine Dispute Resolution Center Self-adjusting alimony orders lawyer-attended mediation arbitrator family mediation divorce mediators Massachusetts lawyer high-risk methodology family law mediation family law arbitrator Massachusetts Lawyers Weekly annulment support orders divorce lawyers divorce mediations Massachusetts alimony Alimony Reform Act self-adjusting alimony family law divorce mediator Act Reforming Alimony in the Commonwealth Major League Baseball Arbitration traditional negotiations Massachusetts lawyers alimony statute private dispute resolution Child Support Guidelines health insurance med-arb divorce arbitrators Cohabitation Uniform Arbitration Act family support dispute resolution health coverage facilitated negotiations Divorce Massachusetts Alimony Reform Act disputes Obamacare family law arbitrators child support litigation separation family and probate law disputes General term alimony Baseball Players mediations mediator arbitrators conciliation divorce and family law Massachusetts divorce lawyers Family Law Arbitration DOMA divorce arbitrator divorce process Baseball arbitration alimony law Levine Dispute Resolutions alimony Chouteau Levine IRC §2704 medical benefits fraud Matrimonial Arbitration MLB labor agreement COLA how baseball arbitration works pre-ARA alimony LDRC divorce and family law mediators med/arb special master Massachusetts divorce mediators rehabilitative alimony Boston lawyers mediation divorce mediation mediators divorce agreement Baseball Arbitration Divorce Agreements Levine Dispute Resolution Center LLC divorce judgment divorce litigation alimony orders SJC Levine Dispute Resolution resolve disputes Massachusetts alimony and child support Defense of Marriage Act