Neither baby assist nor baby advantages are taxable, “Albuquerque Journal

Q: I am finalizing the terms for a divorce from my 19 year old husband. We have two children and I will have custody of my husband who has a visitor. He’ll pay me child support and child support. I am aware that maintenance is no longer tax-deductible, but I am wondering if this is also the case with child benefit.

A: There are a few things to clear up. First, for divorces finalized after 2018, alimony is no longer a tax deduction for the party making the payment. That too means that the recipient does not have to include the maintenance in the income.

For divorces before 2019, the alimony paid could be deducted, but the recipient had to report the payment as income. This has often been beneficial as the payer is generally in a higher tax bracket than the payee, allowing the parties to negotiate how the tax advantages and disadvantages could be shared.

Now maintenance is no longer a tax problem for either party. And let me make it clear that any divorce that was finalized before 2019 will continue to be taxed under the old rules even after tax years after 2018.

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Child benefit was never deductible for the paying party and never an income for the recipient. The support should address the needs of the child. If it were taxed, there would be less after-tax money than would be needed to support the child.

Funds that you receive for both alimony and child benefit are not included in your taxable income. However, your husband will also not be able to claim alimony tax relief, as it might have been if your divorce occurred in 2018 or earlier.

You should be aware that the real estate settlement you negotiate can have tax implications. Wealth statements are not income, but anything you get from your husband will result in you taking over his tax base.

The tax base is used to determine the gain or loss on a future sale. You and your husband should consider the tax implications of sharing marital property.

Q: When I was a student in college, my parents paid my tuition fees directly to the school. We were told this was not a gift because the money never passed through my hands. I borrowed money to get a Masters degree and graduated with $ 23,000 in debt. After making payments for a few years, my parents paid out the balance of $ 18,400. Is there a way for me to treat this as not a gift because it is related to college expenses?

A: Payments made directly to a college do not need to be reported as gifts. Payments to medical care providers are treated equally. Loan repayment does not apply to this gift treatment exception. The person who received the gift does not report it as income.

You do not need to report anything related to the payment of the loan by your parents. Your parents gave you a gift of $ 18,400. If their payment was from community funds (because New Mexico is a community owned state), each of your parents gave a gift of $ 9,200.

Tax law allows anyone to give up to $ 15,000 as a gift without reporting the gift to the IRS. The person receiving the gift must have a current right to enjoy the property for this $ 15,000 exclusion to apply.

When a donor transfers money to a third party for the benefit of another person, e.g. For example, if your parents paid your loan, the courts will treat the transfer as if the money was given to you, and then pay the loan. This will qualify the transfer for the annual $ 15,000 exclusion.

This means that your parents do not need to report the loan repayment as a gift. The only exception would be if your parents gave you other gifts during the year that totaled more than $ 15,000 for each of your parents.

The repayment of the loan is not part of your taxable income. This is true regardless of how big the gift may be. The tax law only states that gifts received during the year are not included as income.

James R. Hamill is the director of tax practice at Reynolds, Hix & Co. in Albuquerque. He can be reached at

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