Legal fees paid by the payor spouse, whether on account of child or spousal support, are not deductible. Further, they are not deductible when the services provided related to obtaining custody of children, obtaining a divorce or negotiating a separation agreement, establishing a right to spousal support after divorce, even if subsequently provided for under a court order or written agreement, and lump sum spousal support amounts.
Legal fees relating to the following types of procedures are deductible by the recipient of the support in the year the fees are paid:
1. obtaining an order for child or spousal support;
2. enforcing an existing order for child or spousal support;
3. varying an existing order for child or spousal support; or
4. defending a reduction of child or spousal support.
Legal fees paid and deducted from income for the above must be reduced for any legal costs awarded by the court that are received by the recipient spouse in the same year. Cost awards paid subsequent to the payment of deductible legal fees will be included in the recipient’s income for the year the award is received.
By Charles Baker