This post was originally published on Forbes May 7, 2015
Alimony deductions seem to generate more than their fair share of tax court litigation. The latest I have noted is the case of Joshua Henry Wish. It is the kind I like, a case where the taxpayer wins without the help of an attorney. It was not a total win as he was dinged with a small math error and it is a summary opinion that cannot be used as a precedent, but still a win is a win and you have to take what you can get.
Petitioner and his former wife entered into the agreement that she would homeschool their child with the explicit understanding that their decision would cause financial hardship for her because she would not be able to work while performing the schooling. Under the terms of the written agreement and their understanding, it was solely within his former wife's discretion as to whether she would go back to work or continue homeschooling their child. During the seventh month of the agreement under the divorce order, the former wife requested increased spousal support payments from petitioner, but he was unable or unwilling to pay more. Hence, petitioner's former wife decided to return to work, and therefore the child was no longer homeschooled. That did not mean that the child was not schooled, because the child continued to be schooled, albeit at a different location, i.e., public school. Accordingly, the contingency was not whether the child discontinued school, but whether petitioner's former wife was willing to make financial sacrifices by not working so as to provide the schooling.