J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

37.8 Legal Fees of Marital Settlements

If you are receiving taxed alimony, you may deduct part of your legal fees. Ask your attorney to divide his or her fees into charges for arranging: (1) the divorce or separation and (2) details of the alimony payments.

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Caution

Spouse’s Legal Fees

You may not deduct your payment of your spouse’s legal fees as a miscellaneous itemized deduction, even if the fees are only for tax advice. Furthermore, a payment of your spouse’s legal fees will not qualify as deductible alimony even if paid under court order if liability for the payment might survive the payee-spouse’s death under state law (37.4).

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You may be able to deduct the legal fees allocated to (2), but you may not deduct the fee attributed to the divorce or separation negotiation. However, the deduction is subject to the 2% adjusted gross income (AGI) floor on miscellaneous itemized deductions (19.1) and if you are subject to alternative minimum tax, the deduction is not allowed for AMT purposes (23.2). If the alimony is not taxed to you, you may not deduct any part of the fee. However, part of a fee allocated to a property settlement may be added to the basis of the property.

If you are paying deductible alimony, you may not deduct legal fees paid for arranging a divorce or for resisting your spouse’s demands for alimony. Furthermore, you may ...