Ref: Vanderhal v. Comm’r, TC Summary 2018-41

The divorce decree stated that payments by husband on ex-wife’s student loan debt were to be allowed as part of alimony.  On audit, the IRS maintained that they should be a non-deductible part of the property settlement incident to the divorce.  The Tax Court found in favor of the taxpayer and allowed the payments as part of alimony noting that the divorce agreement did not specifically denote the division of debts as tax free transfers of property in this case. Therefore, the payments fit within the definition of alimony under Code Sec 71 and were deductible by Vanderhal.