Alimony recapture may occur if there is a substantial decrease in the amount of the alimony payments in the second year.

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Alimony recapture rule applies to situations where the alimony payments decrease significantly in the third year or later years. However, it also applies to situations where there is a substantial decrease in the amount of the alimony payments in the second year, but only if the decrease is attributable to the front-loading of alimony payments in the first year. This rule is intended to prevent taxpayers from using front-loaded alimony payments as a way to avoid paying taxes on property settlements.

Alimony Recapture May Occur If There Is a Substantial Decrease