In short
Alimony is a payment to a spouse or former spouse under a divorce or separation agreement. For agreements made after 2018, alimony is neither deductible by the payer nor taxable to the recipient.
Key takeaways
- Agreements made before 2019 keep the old rule (deductible by the payer, income to the recipient) unless modified to adopt the new one.
- Child support is never deductible or taxable.
- Property transfers between spouses incident to divorce are generally tax-free.
Where it's tested
REG: Individual Taxation: Gross Income — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Under a divorce agreement executed in 2021, one ex-spouse pays the other $2,000 per month in alimony. How is this treated for federal tax purposes?