Without Preparation, Divorce Can Create Tax Headaches
When entering into a divorce, naturally, tax implications can play a prominent role for both parties in determining how to approach contested issues and settle finance-related disputes. This is especially true in high net worth divorces.
An experienced lawyer will not only help a client identify the potential tax pitfalls that accompany negotiating or litigating a divorce, but also steer that client to appropriate experts who can provide specific tax and other financial guidance as he or she prepares for post-marriage life. At Fried and Fried, P.A., we excel in both. Partner Linda Holly Fried is board-certified in marital and family law in Florida, and combined, our attorneys have more than seven decades of results-driven experience. We also maintain working relationships with certified public accountants (CPAs) and tax planners throughout Southwest Florida to augment our divorce legal counsel.
What Are Some Tax Issues To Keep In Mind?
Most individuals’ primary tax concerns will arise with respect to the division of marital property and the establishment of alimony payments.
- Under federal tax law, most transfers of property pursuant to a divorce decree or settlement are not subject to taxation. In certain situations, however, including those made outside specific time windows, transfers may be taxed.
- Alimony payments are tax-deductible by the payer and must be reported as taxable income by the recipient. This can affect whether a client is best served by receiving substantial alimony in lieu of a larger share of marital assets or vice versa.
Our goal in high net worth divorces is twofold: First, we work to identify the core legal issues that must be addressed and resolve them in a client’s favor. Second, we counsel clients on how a divorce will impact their financial futures and steer them toward the appropriate financial planning resources.
Contact Our Fort Myers Firm
Divorce tax issues may seem overwhelming at first, but they needn’t be. Call 239-243-9287, toll free 888-831-2597 or send an email to arrange a consultation with the attorneys of Fried and Fried, P.A.