Alimony in Gross
Alimony takes two forms in Alabama: alimony in gross and periodic alimony. Alimony in gross provides the means by which property rights and interest may be terminated by a series of payments for a fixed period of time, by use of property for a certain period of time, or payment of loan obligations. Alimony in gross payments survives the death of the payor or the recipient until all required payments have been made. Periodic alimony on the other hand is characterized by payments which are uncertain either in time or total amount. For instance, payments which terminate upon the death of the recipient or upon the marriage of the recipient would be characterized as periodic alimony.
Alimony in Gross
A number of factors enter into the computation of alimony in gross: earning ability of each party, future earning potential of the parties, source of marital property and how it was attained, length of the marriage, degree of fault of the defendant spouse, compensation to the recipient for loss of future support and property rights.
Alimony in gross is not modifiable in post-judgment proceedings based on a change of payor’s or recipient’s financial circumstances. Alimony in gross is considered to be a form of property settlement and as such is not modifiable after 30-days from judgment and order. Alimony in gross payments are dischargeable under the circumstances of the bankruptcy of the payor.
IRS Tax Considerations
Payments in the form of alimony in gross are not deductible on behalf of the payor nor reported as income by the recipient. On the other hand, periodic alimony is deductible from the gross income reported by the payor and reportable as income by the recipient spouse.