H.R. 1, Sec. 11051 Repeal of deduction for alimony payments

By now you are probably aware that you have until December 31, 2018 to structure separate maintenance payments as deductible alimony.

A copy of SEC. 11051 of H.R. 1 follows should you be interested in the actual language used in the new tax legislation.

 

SEC. 11051. REPEAL OF DEDUCTION FOR ALIMONY PAYMENTS.

 

(a) IN GENERAL. -Part VII of subchapter B is amended by striking section 215 (and by striking the item relating to such section in the table of sections for such subpart).

 

(b) CONFORMING AMENDMENTS. –

(1) CORRESPONDING REPEAL OF PROVISIONS PROVIDING FOR INCLUSION OF ALIMONY IN GROSS INCOME. –

  • (A) Subsection (a) of section 61 is amended by striking paragraph (8) and by redesignating paragraphs (9) through (15) as paragraphs (8) through (14), respectively.
  • (B) Part II of subchapter B of chapter 1 is amended by striking section 71 (and by striking the item relating to such section in the table of sections for such part).
  • (C) Subpart F of part I of subchapter J of chapter 1 is amended by striking section 682 (and by striking the item relating to such section in the table of sections for such subpart).

 

(2) RELATED TO REPEAL OF SECTION 215. –

  • (A) Section 62(a) is amended by striking paragraph (10).
  • (B) Section 3402(m)(1) is amended by striking ‘‘(other than paragraph (10) thereof)’’.
  • (C) Section 6724(d)(3) is amended by striking subparagraph (C) and by redesignating subparagraph (D) as subparagraph (C).

 

(3) RELATED TO REPEAL OF SECTION 71. –

  • (A) Section 121(d)(3) is amended – (i) by striking ‘‘(as defined in section 71(b)(2))’’ in subparagraph (B), and (ii) by adding at the end the following new subparagraph: ‘‘(C) DIVORCE OR SEPARATION INSTRUMENT. – For purposes of this paragraph, the term ‘divorce or separation instrument’ means—‘‘(i) a decree of divorce or separate maintenance or a written instrument incident to such a decree,‘‘(ii) a written separation agreement, or ‘‘(iii) a decree (not described in clause (i)) requiring a spouse to make payments for the support or maintenance of the other spouse.’’.
  • (B) Section 152(d)(5) is amended to read as follows: ‘‘(5) SPECIAL RULES FOR SUPPORT. – ‘‘(A) IN GENERAL. – For purposes of this subsection – H. R. 1—37 ‘‘(i) payments to a spouse of alimony or separate maintenance payments shall not be treated as a payment by the payor spouse for the support of any dependent, and ‘‘(ii) in the case of the remarriage of a parent, support of a child received from the parent’s spouse shall be treated as received from the parent. ‘‘(B) ALIMONY OR SEPARATE MAINTENANCE PAYMENT. – For purposes of subparagraph (A), the term ‘alimony or separate maintenance payment’ means any payment in cash if – ‘‘(i) such payment is received by (or on behalf of) a spouse under a divorce or separation instrument (as defined in section 121(d)(3)(C)), ‘‘(ii) in the case of an individual legally separated from the individual’s spouse under a decree of divorce or of separate maintenance, the payee spouse and the payor spouse are not members of the same household at the time such payment is made, and ‘‘(iii) there is no liability to make any such payment for any period after the death of the payee spouse and there is no liability to make any payment (in cash or property) as a substitute for such payments after the death of the payee spouse.’’.
  • (C) Section 219(f)(1) is amended by striking the third sentence.
  • (D) Section 220(f)(7) is amended by striking ‘‘subparagraph (A) of section 71(b)(2)’’ and inserting ‘‘clause (i) of section 121(d)(3)(C)’’.
  • (E) Section 223(f)(7) is amended by striking ‘‘subparagraph (A) of section 71(b)(2)’’ and inserting ‘‘clause (i) of section 121(d)(3)(C)’’.
  • (F) Section 382(l)(3)(B)(iii) is amended by striking ‘‘section 71(b)(2)’’ and inserting ‘‘section 121(d)(3)(C)’’.
  • (G) Section 408(d)(6) is amended by striking ‘‘subparagraph (A) of section 71(b)(2)’’ and inserting ‘‘clause (i) of section 121(d)(3)(C)’’.

 

(4) ADDITIONAL CONFORMING AMENDMENTS. – Section 7701(a)(17) is amended—

  • (A) by striking ‘‘sections 682 and 2516’’ and inserting ‘‘section 2516’’, and
  • (B) by striking ‘‘such sections’’ each place it appears and inserting ‘‘such section’’.
  • (C) EFFECTIVE DATE. – The amendments made by this section shall apply to—
    1. (1) any divorce or separation instrument (as defined in section 71(b)(2) of the Internal Revenue Code of 1986 as in effect before the date of the enactment of this Act) executed after December 31, 2018, and
    2. (2) any divorce or separation instrument (as so defined) executed on or before such date and modified after such date if the modification expressly provides that the amendments made by this section apply to such modification.

 

*** Please remember to consult with a tax professional regarding the details of each specific situation. *** Please contact BST partner, Thomas Hutson, CPA if you would like to receive additional information or discuss these new rules regarding your particular circumstance.

 

Copyright 2017, BST & Co. LLP


Posted on January 10, 2018 at 1:01 PM