Category: Alimony

Prepayment of Alimony is not Tax Deductible

November 08, 2012 | Alimony, Court Decisions, Legal Perspective

Icon for author Brian Vertz Brian Vertz

Under federal tax laws, alimony payments are deductible, but only if they meet all of the legal requirements. One of the most important requirements is that alimony payments must be paid in connection with a “divorce or separation instrument,” which means a written agreement or court order. Any payment that is not made under a divorce or separation instrument is not tax deductible, even if the written agreement or court […]

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Double Dip and Goodwill Considered by Wisconsin Supreme Court

Last month the Wisconsin Supreme Court weighed in on two issues that are important to family lawyers and their clients who operate professional practices like physicians, lawyers, dentists and accountants. In Marriage of McReath, the Wisconsin Supreme Court ruled that “saleable” goodwill would be considered marital property, in a case where a dentist argued that “personal” goodwill should not be counted as part of the marital estate. The Court also […]

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Homeschooling Children Does Not Justify Alimony, says Superior Court

In Kent v. Kent¬†(March 18, 2011), the Superior Court of Pennsylvania rejected a parent’s argument that she should be entitled to collect alimony for a period of eleven years so that she could continue to homeschool the parties’ minor children. It was undisputed in this case that the mother had withdrawn from the workforce five years earlier in order to home-school the parties’ children, which she continued to do up […]

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What’s the Hullabaloo about Balicki?

In Balicki v. Balicki, 2010 Pa.Super.134 (2010), the Superior Court affirmed the trial court’s decision to discount the value of an insurance business, based on the hypothetical income taxes that would be incurred by its owner upon sale of the business. The trial court’s decision was itself a reversal of the master’s report, in which the master found that the tax discount was inappropriate because the owner would not likely […]

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10 Cash Flow Rules In Divorce (Part I)

In business, they say, cash flow rules. The same principle is true, I find, in divorce. I have been brainstorming a set of cash flow “rules” for divorcing spouses. Here is part one: 1.¬† Never run out of cash. My #1 divorce rule is the as Inc Magazine‘s #1 business rule. In divorce, there is a period of time immediately following separation when a divorcing spouse’s cash flow may be […]

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Alimony Tax Gross-Up Approved

August 09, 2010 | Alimony, Court Decisions, Divorce, Legal Perspective, Tax Issues

Icon for author Brian Vertz Brian Vertz

In Balicki v. Balicki, 2010 PA Super. 134 (July 30, 2010), the Superior Court considered the husband’s argument that the alimony order provided more income to his ex-wife than she could spend (as shown by her budgetary expenses). The trial court in its opinion justified the alimony award by noting that the wife would pay income tax on her alimony award, thereby reducing the after-tax dollars available to her. The […]

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