Alejandro J. and Elena G. Rojas v. Comm., TCM 2022-77

Alejandro and Cristina divorced in 2012. On July 25, 2012, the Los Angeles Superior Court entered a judgment of dissolution, that stated in part: “[F]amily support shall be payable by Respondent [Alejandro] to Petitioner [Cristina] in the monthly amount of $4,500.00 payable on the 1st of each month. . . Such support order commences Aug. 1, 2011, and is continuing until both minor children emancipate or Petitioner remarries. If Petitioner remarries, the family support obligation shall be modified to $2,500.00 per month until each minor child emancipate[s].”

Note. This is a grandfathered divorce agreement, and if the Court found the payment to be alimony, the payments would be deductible by the payer in 2023.

Child support not deductible. Section 215(a) generally permits an individual to deduct from gross income “alimony or separate maintenance payments,” as defined in §71(b). However, §215(b) provides that this deduction is allowable only if the alimony or separate maintenance payments are includible in the recipient’s gross income under §71. Alimony or separate maintenance payments are not includible in the payee spouse’s gross income and consequently no deduction is allowable under §215, for certain such payments that are made or treated as made to support the payor spouse’s children (§71(c)). Child-related contingency makes family support not deductible. The provision of the divorce instrument requiring Alejandro to make family support payments only until both minor children are emancipated is a child-related contingency. The existence of this child-related contingency triggers the application of §71(c)(1) and (2)(A) and makes the payments in question nonincludible in Cristina’s gross income under §71(a) and hence nondeductible by Alejandro under §215(b).