March 13, 2013 By Paul Wallin

When going through a divorce, most people only think about trying to resolve the current issues at hand or going to court. However, many parties to a divorce do not think about the tax consequences after orders have been made by the court or the divorce has been finalized and there is a judgment in place. Below are several things you need to know about taxes and divorce in Orange County.


Under the Internal Revenue Code Section 215, the paying spouse may claim a deduction of the amount of spousal support he or she paid. Moreover, the spouse receiving spousal support must claim the amount he or she receives as income.

Under the Internal Revenue Code, spousal support paid per a court order or divorce judgment will be considered alimony (another word for spousal support) for federal tax purposes if:
a. Both spouses do not file a joint tax return;
b. Spousal support payments are in cash, checks, or money orders;
c. The payment is for the benefit of a spouse or former spouse;
d. The divorce judgment or court order declares that the payments are for spousal support;
e. The paying spouse does not have to make any further payments after the death of the spouse receiving support; and
f. The payment is not treated as child support or a property settlement.


Child support is not treated the same as spousal support for tax purposes, even though such payments are for the support of someone else. Child support is never deductible, and the parent who receives the child support payments does not have to claim the payments as income.


Generally, in a division of property in a divorce judgment, there are no tax consequences for either party. Like child support, non-cash property settlements and payments that are part of community property income are not tax deductible. These kinds of payments are not considered for the benefit of a former spouse and are therefore not spousal support.

However, if you and your spouse have included a division of real property, for example a house or a lot of land, in your divorce judgment, where title to the property is jointly held, it is important that the transfer of title from one spouse to the other is done through an inter-spousal transfer deed. By transferring title through this kind of deed, the community interest received by the spouse who is awarded the real property will not be considered as income and will not be taxed.

Going through a divorce is a complicated process. It is important that you are fully advised of the tax consequences related to your divorce matter. Our experienced Orange County Divorce attorneys can help you now. We have a reliable legal team. Call us today at 1-888-749-7428. Wallin and Klarich has offices in San Diego, San Bernardino, Riverside, Los Angeles and Orange Counties and can help you now. We will be there when you call.

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