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Tax Aspects of Divorce: From Alimony to Property Settlements

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, June 8, 2023

Recorded event now available

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This webinar will discuss the tax consequences of decisions made relative to divorce. Our panel of experienced CPAs will explain the tax ramifications of property settlements, including personal residences, real property, investments, and retirement accounts, and review the impact of recent legislation and cases on divorce.

Description

Property settlements are a major component of a divorce settlement. Although the transfer itself isn't taxed, there are tax consequences that should be considered. Appreciated property and stock transfers are usually divided based on fair market value; however, the cost basis of the items transferred can generate substantially different tax payments for the taxpayer and spouse. Eligibility requirements for the IRC Section 121 gain exclusions must be considered when a personal residence is sold or transferred incident to divorce. And a qualified domestic relations order may be needed to defer taxes on retirement plan transfers.

The Tax Act of 2017 significantly altered the tax consequences of divorce. Beginning with 2019 divorce agreements, alimony is no longer deductible by the payor or taxed to the recipient. However, older agreements can be modified to incorporate changes made by the Act. The suspension of the dependency deduction somewhat negated the need for certain provisions in a separation agreement. Beginning in 2026, however, the dependency deduction returns, making this again a relative tax choice for divorcing parents. Tax advisers working with married clients need to know the tax consequences of decisions made during a divorce.

Listen as our panel of individual income tax experts reviews the particulars of tax planning relative to divorce, focusing on tax-saving steps for divorcing clients.

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Outline

  1. Tax aspects of divorce: introduction
  2. The Tax Act of 2017
  3. Alimony and child support
  4. Pre-marital and post-marital agreements
  5. Property settlements
    1. Retirement accounts
    2. Personal residences
    3. Business interests
    4. Investments
    5. Appreciated property
  6. Dependents
  7. Recent cases

Benefits

The panel will cover these and other key issues:

  • The impact of the Tax Act of 2017 on divorce
  • When property division can trigger tax
  • Calculating tax on appreciated property transferred due to divorce
  • Recent court decisions relative to tax issues in divorce

Faculty

Sheppard, Ryan
Ryan C. Sheppard, CPA, CFF
Partner
Rolleri & Sheppard CPAS

Mr. Sheppard has extensive experience in tax and business consulting for privately held companies,...  |  Read More

White, Jayme
Jayme L. White, CPA, EA
Senior Manager
Rolleri & Sheppard CPAS

Ms. White is an experienced CPA skilled in tax, consulting, accounting and auditing for high net worth individuals,...  |  Read More

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