Understanding The Tax Implications Of A High-Asset Divorce
The division of assets during divorce proceedings has and will continually become more complex. Division of property during a divorce can involve asset value appraisals, complexities regarding the division of pension plans and the proper preparation of QDROs, and the tax consequences accompanying divorce and property division.
At Rioles Law Offices, attorney Brenda F. Rioles has more than 30 years of experience working with individuals to navigate such complex issues. She provides her clients with the information they need to make knowledgeable decisions about their assets as they navigate toward their new life.
Preventing Post-Divorce Tax Issues
In Rhode Island, the goal of courts during a divorce is to identify marital vs non-marital property and thereafter to divide marital property equitably. However, equitably does not always mean equally. There are some instances where the property is treated separately and not subject to property division. For example, you may receive an inheritance or gift from a family member that will not be subject to the property division process. There is also a different division relating to pre-marital vs inherited/gifted property.
Nevertheless, the law concerning property division is not often clear, and mistakes in the division process can cost you thousands of dollars. Transactions or exchanges deemed improper could also result in scrutiny by state tax officials and the IRS.
It is crucial to have an advocate who thoroughly understands the property division and alimony process, can identify potential tax issues and can stand up for your rights to ensure your settlement covers all the important aspects of your marital estate. Attorney Brenda F. Rioles has been representing individuals through the divorce process since 1986. She understands the handling of child tax credits, alimony, the division or valuation of tax-advantaged retirement accounts, and the tax implications of liquidating assets, such as stocks or real property.
The Division Of Assets And Capital Gains Tax Treatment
Black’s Law Dictionary defines a capital gain as “the profit realized when a capital asset is sold or exchanged.” Capital assets can include stocks, property held for sale during the course of business, and inventory. Long-term capital gains concerning income are received from exchanging or selling a capital asset generally held for over one year. A short-term capital gain results when making income off of assets held for shorter terms.
There are many instances where the division of assets during the divorce process can trigger capital exchange tax treatment. Even a seemingly even exchange of assets may still result in capital gain tax treatment for one of the spouses involved in the transaction. Particularly, individuals going through a divorce need to pay attention to assets that appreciate considerably in value when exchanging or dividing such assets during the property division process and be able to identify assets that have no tax implications and those that may result in significant tax consequences, such as the transfer of real estate vs the transfer of a 401k account or stock account. Attorney Rioles can look at your specific situation and tell you what to consider before filing for divorce as well as guide you effectively through the divorce process. After evaluating the legal ramifications of property division in your divorce, she can also identify your need to include other professions such as a certified public accountant. An accountant can work with you individually and with your attorney to discuss precise tax implications for your specific assets at hand to assist you in creating a secure settlement with no future surprises.
Let A Respected And Knowledgeable Attorney Serve You
Attorney Rioles is the senior litigator and practitioner who will personally meet with you and handle your case. You will not be shifted to an associate that is unfamiliar with your legal matters. As an aggressive litigator and negotiator, she critically considers every possible option, solution and outcome. Ms. Rioles makes herself responsive to those she represents and will promptly respond to emails and telephone calls.