Remembering Tax Impact in Divorce Settlements
Granted, taxes are not foremost in the minds of most couples going through a divorce.
But for couples with sufficient assets, income and civility, tax impact is an important consideration which may be factored into any divorce settlement.
Couples should pay particular attention to alimony, the sale of the house, income tax filing status and timing of the divorce.
An interest in real estate can be transferred from one spouse to another tax-free, but alimony payments are normally taxable income to the receiving spouse.
Capital gains treatment on sale of real estate may favor selling as a couple before the divorce, rather than as a single after the divorce.
For late-in-year divorces, it may pay to wait until early the following year.
In appropriate cases, it may be well worth consulting a tax accountant or tax attorney on the structuring of any divorce settlement.
Read more in this [New Jersey] Courier Post article: Keep your cool in a divorce to avoid tax headaches.
