Previously, we examined the paragraph and subparagraphs defining “divorce or separation instruments.” Now let’s take a look at which sections of TCJA incorporate these subparagraphs.
The repeal of the alimony tax sections for the inclusion of income and deduction has an ancillary impact on other divorce tax issues. The effective date for all ancillary issues discussed in this article is December 31, 2018, the same as the alimony repeal. These December 31, 2018, changes shall be referred to herein as “post-2018” changes. Continue reading →
Divorce was hard enough, and now alimony tax reform. Do you feel good or bad about alimony? No matter your answer, this alimony tax reform revolutionizes the divorce arena, and you need to know how it may affect you and your clients. Judges need to know how it might affect those whose appear before them as litigants. So let’s dig in. Continue reading →
Facts: A husband and wife filed joint returns. The returns were prepared by the wife. The returns understated the amount of tax due, mostly because they wrongly double-counted certain gambling losses incurred by the husband.
The IRS assessed a deficiency. The wife filed a petition for innocent spouse relief, the IRS denied it, and the wife appealed to the Tax Court. Continue reading →
Dear Carolyn,
I think my husband and I may be getting separated and divorced, and I am concerned about our 2016 tax return, which has not been filed yet. The tax return is under an extension. My husband has a small business in Greensboro, and I have no idea if he reports all of the income in the business. I have heard that I can be responsible if I sign the return. He never gives me a copy. Do you have any thoughts on this issue? Do I have to worry?
~ Worried and in the Dark Continue reading →
Stapleton v. Comm’r, T.C. Memo. 2015-171, 2015 WL 5049758
Facts: A father and mother had two children. The parents were never married. No court was ever asked to decide custody, but the parents agreed that the father would have the children every Monday and Wednesday night and every other weekend. In 2011, the father had custody of the children for 176 days. Continue reading →
Belot v. Comm’r, T.C. Memo. 2016-113, 2016 WL 3248031 (2016)
Facts: During their marriage, the parties operated a dance studio. The business consisted of an S corporation which was the actual studio, an LLC which operated a boutique selling dance clothing, and another LLC which owned the real estate on which the studio operated. The parties owned each of these entities in different percentages. Continue reading →
Anderson v. Comm’r, T.C. Memo. 2016-47, 2016 WL 976816 (2016)
Facts: An Alabama court entered a pretrial order in a divorce case, requiring both parties to “[m]aintain status quo as to payment of house note or rent, utilities, food, necessities, fixed credit obligations, ” 2016 WL 976816, at *1. After the order was entered, the husband transferred at least $1,000 each month to the wife “for her spending money and other things that I had previously paid for.” Id. Continue reading →
Wolens v. United States, 125 Fed. Cl. 422 (2016)
Facts: The parties married in New York, but divorced in England. Their English divorce decree provided for a large initial payment to be made by the husband to the wife, followed by annual payments of £441,667 in 2007, 2008, and 2009. (The 2009 payment was one pound less.)The husband’s initial tax return did not claim the 2007 payment as alimony. He later filed an amended return which did claim the 2007 payment as alimony. The IRS disallowed this return and refused to issue a refund. Continue reading →
Hollimon v. Comm’r, T.C. Memo. 2015-157, 2015 WL 4747779 (2015)
(a) Facts: During their marriage, the parties established and worked for a business providing temporary staffing to hospitals. The wife testified that the husband ran the business and she was an employee. The husband testified that the parties ran the business together. Continue reading →
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