Stephen J. Buhler, Attorney at Law

Celebrities are like us when it comes to divorce

Despite what some popular magazines may say, celebrities are not like Salt Lake City residents in many areas of life. There are some key similarities, however, when it comes to the legal system. Because the law applies equally to everyone, there are lessons that can be learned when celebrities go through a divorce.

Recently, actors Brad Pitt and Angelina Jolie made headlines after Jolie filed for divorce because of irreconcilable differences between the couple. The case is sure to become a high asset divorce as the multi-million dollar couple goes through the process of dividing their various assets.

While the extent of assets owned by Pitt and Jolie might differ from other couples, the issues in the divorce may be largely the same. For instance, it is unknown at this time whether Pitt or Jolie will seek alimony from the other spouse. If alimony is sought, its availability and amount would be determined under the same legal principles that apply to other couples.

Typically, spousal support is based on the reasonable needs of the parties. The couple's lifestyle and standard of living during the marriage is taken into account in making the determination of reasonable needs.

Alimony is generally taxable as ordinary income to the person who receives it. Meanwhile, the payments are deductible to the payor as an above-the-line deduction. This means the alimony payments would be deducted even for those who do not itemize their deductions.

There are restrictions on using alimony for federal income tax deduction purposes. First, the payments must be made pursuant to a court order or legal agreement. Accordingly, it would not count if the payments were made voluntarily. Second, the payor cannot be living together with the recipient unless there is some exception in the court order. Accordingly, individuals should understand whether these requirements are satisfied in their case and how their alimony payments will be treated.

Source: Forbes, "What you can learn about divorce & taxes from Brad Pitt & Angelina Jolie," Kelly Phillips Erb, Sept. 20, 2016

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