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A house divided cannot support write-offs

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in Small Business Tax

Q. I’m currently involved in an acrimonious divorce proceeding. Both of our attorneys are advising us to stay in the home. Since the house is in my name alone, can I claim alimony deductions for the value of this benefit? Anonymous

A. No. To count payments as tax-deductible alimony, they must be made in cash or a cash equivalent. Even worse, you can’t qualify for any alimony deductions while you and your former spouse are living in the same house that you previously occupied as a married couple. It doesn’t matter if your living space is physically separated. Tip: Don’t begin making alimony payments until your soon-to-be exspouse has vacated the house. For more details, see IRS Publication 504, Divorced or Separated Individuals, at www.irs.gov/pub/irs-pdf/p504.pdf.

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