Tax Consequences Of Divorce: A North Shore, Massachusetts, Family Law Attorney


Divorce creates two households where there had previously been one. As a result, there are certain tax consequences that must be taken into consideration in regard to property division, child custody and support, and alimony. Understanding how your taxes and declared income will be affected can help you avoid unpleasant surprises from the IRS. Additionally, you can increase the effective value of property to be divided between you and your ex-spouse by minimizing tax liabilities triggered by divorce while maximizing assets.

To learn how our experience with planning for the tax consequences of marriage dissolution can help protect your interests in a Massachusetts divorce, contact the North Shore law office of Annette L. Baker & Associates.

How Alimony can Effect Your Taxes

Because alimony and property division are often considered together in negotiating a divorce settlement, it can be tempting to manipulate the characterization of a given property transfer as alimony to a lower-income spouse in order to reduce tax liabilities for both spouses, but the IRS will often look back three years after the effective date of the divorce in order to determine whether alimony or other support payments were not in fact property transfers with adverse tax consequences.

Child Support and the Division of Child Tax Credits

Divorcing spouses need to understand that even such considerations as child support have important tax consequences for both custodial and noncustodial parents, and the division of child tax credits and deductions between the spouses can be just as valuable and negotiable as the division of any other asset or liability. Your attorney's understanding of the use of tax attributes in property division and support questions can give you a significant advantage both in negotiations and in contested matters submitted to decision by the court.

Under certain circumstances that are best described in detail in the context of your specific situation, it is possible to make what appear to be substantial concessions in property division negotiations, only to realize a positive tax treatment of your retained assets.

Contact Divorce Attorney Annette L. Baker Today

Planning for the tax consequences of divorce is highly sensitive to the facts of your particular case, and depends a great deal on such factors as each spouse's marginal rate, the appreciation in value of any given asset during the marriage, and the availability of deductions, exemptions, and credits relating to children, disabilities, certain business assets, and other considerations.

For sophisticated tax planning and guidance provided to you in plain English, contact an experienced North Shore divorce lawyer at the office of Annette L. Baker & Associates in Beverly's Cummings Center.