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Taxes & Equitable Division
Joint or Separate Returns?
One of the many questions asked by individuals going through the divorce process, especially during tax season, is: “Should I file a joint tax return with my spouse?” The answer to this question is relatively simple. The marital status of the parties to a divorce at the end of the tax year determines their option concerning filing federal income tax returns. If a couple is divorced at any time during the year, including December 31, they are considered single for the purposes of filing taxes. However, if the couple is still married at the end of the tax year, they may either file jointly or file their taxes under the status of married filing separately...(click to continue reading)
Innocent Spouse Rule
In addition to the defenses that may be used by one spouse to avoid liability for an inaccurate joint tax return that were discussed in our article entitled “Taxes and Equitable Division: Joint or Separate Returns?”, there is an exception to the rule of joint and several liability for spouses who file joint tax returns known as the “Innocent Spouse Doctrine” or “Innocent Spouse Rule.” This rule was introduced in 1971 ...(click to continue reading)
Deductibility of Legal Fees
According to provisions of the Internal Revenue Code, certain divorce related legal fees may be tax deductible. This will likely come as a pleasant surprise to those who are recently divorce or those who are currently going through the divorce process. Unfortunately, in most situations, attorney’s fees incurred obtaining a divorce are considered personal expenditures, and thus not tax deductible. I.R.C § 262 (1986). However, there are a few instances in which a spouse may deduct his or her legal fees related to divorce ...(click to continue reading)
Transfers of Property
The Domestic Relations Tax Reform Act of 1984 changed the prior rule of law concerning transfers of property between spouses upon divorce so that divorce related transfers after July 18, 1984 are treated as gifts which result in neither gain nor loss to either party and have no tax consequences ...(click to continue reading)
It is sometimes the case that a large portion of the assets owned by married couples consist of right to payments from pension plans. In many states, like Georgia, these assets are subject to division during a divorce ...(click to continue reading)