The New (Divorce) Tax Law…and Race to the Finish Line

In December of last year, the president signed into effect a new tax law. Among other things, this law will affect the tax impact of the payments of spousal support (also called maintenance or alimony).  Effective January 2019, spousal support will no longer be deductible by the person paying it and will be taxable to the person receiving it.  The practical problem with that is, in the past, the deductibility of maintenance was used as a negotiating tool to which helped parties arrive at settlements for the payment of spousal support. The deductibility of maintenance was of value to the spouse that was paying, due to the fact that it would generally cost the payor [...]