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When divorcing and structuring your property settlement, there are important tax considerations to keep in mind. Internal Revenue Code section 1041 provides guidance on the taxation of transfers of property between spouses. The general rule states that property transfers between divorcing spouses are treated as tax-free gifts and no gain or loss [...] What is Alimony? Alimony is also often called spousal support. Alimony payments are used to provide the spouse that is making a lower-income with funds to cover expenses that are not provided for through child support or through the division of property. Many factors come into play when determining the amount of [...] Your and your spouse’s income and asset information are needed when structuring the key divorce settlement issues: property split and any alimony or child support calculations. If you suspect that your spouse is hiding income or assets, or if you think he/she has the potential to do so, you will gain some protection by [...] Over the years, we have seen cases in which separation or divorce instruments violate the requirements for structuring alimony payments correctly. These situations often produce a negative financial impact for the individual that is paying the alimony and can lead to additional lawsuits and ill feelings. In order to avoid this potential mess, [...] In this article, we address divorce and transfer of Individual Retirement Account (IRA) Assets. We focus on the Traditional IRA because the rules for transfers are more restrictive than for a Roth IRA. (If you follow the rules for transferring ownership interests in Traditional IRA assets for Roth IRA assets, you should qualify for the [...] There are several issues to consider when contemplating a bankruptcy filing as part of a divorce. Certain debts are dischargeable and others are not. The following divorce related debts are not dischargeable in a bankruptcy filing: Taxes (federal, state, real estate, etc) Debts arising from a marital settlement [...] Nine states are Community Property states: Arizona In contrast, other states follow an Equitable property distribution. Both terms are described below. Community Property Community property states consider all property as being in two categories: separate property or community property. Separate property doesn’t need to be split at the time of divorce but community property does. In a community property [...] The ability to claim the dependent child exemption can be a significant advantage for a divorced parent. It’s important that this exemption be consciously planned for as part of the divorce process. Clearly state in your divorce decree which parent has the right to take the exemption during the year(s) of separation, the year of [...] An area where many individuals get into tax trouble is when splitting their Qualified Retirement Accounts (QRPs) and Individual Retirement Accounts (IRAs). Once you have come to the revelation that your assets must be split you may be tempted to start the process by making pre-divorce transfers prior to receiving an official judgment, decree or [...] One of the situations that we see in many family situations is where one spouse is the primary caretaker of the financial obligations for the family. That person may have been in charge of paying the bills, setting up the investment accounts, making investment decisions (stocks, bonds, real estate, mutual funds, etc.), buying and maintaining [...] |
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