Divorce Tax Consequences | Methuen MA Attorneys

Andover MA Asset & Property Division Negotiation Lawyers

The tax consequences of divorce can create significant headaches after divorce if they are not analyzed and evaluated early in the process. The divorce lawyers at Perrault & Associates are knowledgeable and experienced at handling complex tax issues during divorce to avoid problems later.

Contact our law firm to schedule a free consultation to discuss your divorce. We will answer your divorce questions and effectively address any tax concerns during your divorce.

Divorce Tax Consequences

Most assets to be divided during divorce are "tax affected," meaning that the after tax value of the asset is considered during asset and property division negotiation. Capital gains taxes are then projected and considered in the process of dividing assets and property. The following list is an example of property, which can be "tax affected":

• 401K
• Investment property
• Mutual funds
• Stock options
• Stocks

It is especially important to hire a divorce attorney who can assist with tax issues in divorce. You do not want to ignore tax consequences of marital asset and property division because when the property is divided, you could find yourself paying much more in taxes than you anticipated.

As a common example of the tax issues in divorce, consider the situation of a couple who owned a family home as well as an investment home during their marriage. The family home can be transferred to one spouse without tax consequences. The investment property, on the other hand, is likely subject to capital gains taxes when it is sold, which minimizes the overall value of the investment property. Therefore, if you do not consider the tax ramifications, the amount received in the distribution of assets and property is not going to be equal due to the tax treatment.

Minimizing Tax Liability During Divorce

Our divorce attorneys not only anticipate complex tax consequences during divorce, they can also help you minimize your tax liability.

After years of helping clients file for divorce in Massachusetts and New Hampshire, we know qualified experts in the community who can assist with challenging tax issues, such as certified public accountants. At our law firm, we are able to do tax planning simultaneously with an assessment of the assets you'd like to retain in the divorce settlement in asset division.

Alimony versus Child Support Tax Treatment

From an income tax standpoint, divorce can also affect your taxable income. In the case of alimony, the payment can be deductible for the person paying alimony and can be considered income for the person receiving the payment. Child support on the other hand is not deductible nor is it considered income. At Perrault & Associates, our attorneys can help assist to maximize the amount paid and received to benefit all parties.

Contact our lawyers in Methuen, Massachusetts for a free consultation or case evaluation to discuss tax issues during divorce. We are happy to provide you with necessary information regarding your legal issue.

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