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Thursday, December 21, 2017

Tax reform and alimony

KPIX 5 December 20,2017 story by Mark Sayre
H.R. 1, Tax Cuts and Jobs Act, or per its new catchy title at 12/20/17 - ‘‘An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year
2018," changes the tax treatment of alimony effective for divorce and separation agreements entered into after 2018. So, going forward for new instruments entered into after 2018, the payor of alimony gets no deduction and the conference report states that the recipient does not pick up income. Also, H.R. 1 removes "alimony and separate maintenance payments" from IRC 61(a) where it is currently listed as an example of gross income.

This has been proposed before, such as in H.R. 1 (113rd Congress), the Tax Reform Act of 2014 by former House Ways and Means Chairman Dave Camp.

This won't affect many taxpayers. Per IRS stats, less than 1% of individual returns report alimony received.

I was interviewed 12/20/17 for a news clip for KPIX-TV (CBS) by Mark Sayre, about this. You might enjoy it, don't miss my first statement.

What do you think about this change?

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