Tax Considerations In Divorce
Tax considerations in divorce are highly particular to your situation, but here are some general guidelines:
- Property transfers that occur as a result of a marital property division have no tax consequences. For example, if you transfer an asset to your spouse, it is not taxable income for your spouse and it is not tax-deductible for you.
- Alimony is tax-deductible to the person who pays it and taxable income to the person who receives it. As a result, making alimony payments in lieu of another type of property settlement may have tax advantages. You should discuss your situation with your attorney and accountant.
- The cost of valuing a business in divorce is a tax write-off.
- Retirement accounts may face both income taxes and tax penalties if liquidated.
- Stocks and real estate held a year or longer are taxed as long-term capital gains when sold, which means you pay less in taxes that you would with assets held less than a year.
- When creating your parenting plan, it’s important to consider who will receive the dependent tax exemption. If your parenting plan is not properly written and you and your spouse have 50-50 custody, neither of you may be entitled to the dependent tax exemption.
Contact A Community Property Division Lawyer
For more information, contact a divorce tax issues lawyer at DeShon Laraye Pullen PLC, in Phoenix, Arizona. Call 602-626-9552 or 800-409-0262 to schedule a consultation. We look forward to hearing from you.