7 July 2000 External T.I. 2000-0020605 - ALIMONY-SPOUSES LIVING IN SAME HOUSE

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Taxpayer is paying alimony to former spouse, who is in poor physical health. Taxpayer proposes that former spouse live in the same house with taxpayer during the winter. The arrangement two individuals would live in separate rooms, eat meals separately, and lead separate lives except the taxpayer would perform errands for his former spouse.

Will the taxpayer be eligible to deduct alimony payments under paragraph 60(b) of the Act?

Position TAKEN:

Question of fact.

Reasons FOR POSITION TAKEN:

Position taken in other files.

XXXXXXXXXX 2000-002060
T. Young
July 7, 2000

Dear XXXXXXXXXX:

Re: Alimony - Living Separate and Apart

This is in reply to your letter of March 15, 2000, requesting our opinion on the tax consequences of alimony payments in a situation where you and your spouse resume living in the same house.

In your letter, you stated that you are separated from your wife and you are paying her alimony. For health reasons, she has difficulties walking year round and is unable to leave the house during the winter. You indicated that you are prepared to have her live with you during the winter and do errands for her. Otherwise, you would each continue to lead separate lives. For example, she would have separate quarters and you would maintain each other's privacy.

Your enquiry is whether you will be eligible to deduct your alimony payments.

Our Comments

For alimony payments to be deductible under paragraph 60(b) of the Income Tax Act (the "Act")

• the amount must be payable as an allowance for the maintenance of your spouse or former spouse;
• the amount must be payable on a periodic basis;
• your spouse must have discretion as to the use of the amount;
• the amount must be payable under an order of a competent tribunal or under a written agreement; and
• you and your spouse must be living separate and apart because of the breakdown of your marriage.

It is possible for spouses to be living separate and apart because of a breakdown of their marriage while still occupying the same residence. This issue was examined by the Tax Court of Canada in 1986 (Longchamps et al. V. M.N.R., 86 DTC 1694) and it has also been examined by the courts in the context of divorce law. The courts look at a number of indicators when deciding whether a couple residing in the same residence is nevertheless physically living separate and apart. They look to see if the customary behaviour of spouses is present, such as joint social ventures, communication and discussion of family problems, and so on. Of somewhat lesser importance is whether either spouse performs domestic services for the other such as cooking meals or doing laundry. The courts may also look as to why both spouses continue to reside in the same residence if they intended to live separate and apart. In the Longchamps case, the court decided that, although living under one roof, the spouses were living separate and apart because the husband could not afford to live elsewhere. In addition, they had separate bedrooms, the wife managed the household and cared for the children, both spouses considered the husband to be a boarder in the home, the husband bought his own food, the spouses did not socialise together and the spouses rarely spoke to each other. Another factor that could be considered is whether or not support payments continue to be required under the terms of a court order or separation agreement.

Whether two spouses are living separate and apart is a question of fact and each case must be decided upon its own facts. However, based on the information available, in our view you would be considered to be living separate and apart because of a breakdown of marriage at all relevant times.

We trust our comments will be of assistance to you.

Yours truly,

J. Wilson
for Director
Business and Publications Division
Income Tax Rulings Directorate

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