Do we let the alimony payer pay alimoney with pre-tax dollars and tax the alimony recipient by treating it as income?
Or do we let the alimony payer pay alimony with post-tax dollars and let the alimony recipient get it tax-free?
The tax-man gets a comparable bite either way, so it should make little difference to the Feds.
“Do we let the alimony payer pay alimoney with pre-tax dollars and tax the alimony recipient by treating it as income?”
Yes, that’s the way it works.
Actually not. In many, if not most cases, the taxing it on the man's income will generate more revenue to the Feral government because it will be at a higher rate. I suspect this is just a sneaky way to slide in an effective tax increase.
Alimony and similar payments should be taxed at the recipient as income because they are the ones benefiting from it.