Divorce, Alimony, and Property Settlements (Before and) After TCJA: A Wholly Different Rodeo

Author: Bradley Burnett

The Tax Cuts Jobs Act rips the alimony deduction out from under some and very much endangers it for others. There's a whole lot more to it than before. Nothing can be taken for granted by the planner or tax preparer. One must know what to look for and move intelligently forward.

Publication Date: June 2025

Designed For
Anyone desiring to learn the federal tax rules surrounding divorce

Topics Covered

• Divorce Rate
• Alimony Compliance Gap
• TCJA Alimony
• Alimony IRS Computer Generated "Matching" Notice
• Alimony IRS Notice
• Form 1040 Alimony Income
• TCJA Alimony Transition Rule
• Post- TCJA Alimony Ruling
• Divorce Planning Punch List
• Marriage Penalty and Tax Rates
• 2025 House Bill Deduction for Personal Exemptions
• TCJA Home Mortgage Interest (2018-2025)
• Interest Tracing Rules
• Innocent Spouse Relief

Learning Objectives

• Identify the wholly new playing field for divorce planning in general
• Explain how to differentiate the tax compliance challenges which face every tax preparer with divorced, separated or divorcing clients
• Recognize and troubleshoot the alimony compliance gap
• Identify the four basic alimony tests
• Explain how to sort the distinction between alimony, property settlements and child support
• Recognize changes made by TCJA in the divorce arena and carefully sort various effective dates
• Identify which divorce and separation documents a tax preparer needs and critical questions to ask
• Explain the impact of state law on fed tax consequences
• Identify planning for best results

Level
Update

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Basic understanding of divorce, alimony, and property settlements.

Advance Preparation
None