What will the tax implications be after my high asset divorce?

Family Law specialists with over 59 years of experience.

In a high net worth divorce, tax issues loom large. Divorces, by themselves, are not usually taxable events, so you shouldn’t expect the IRS to send you a bill just because you were divorced. Nevertheless, the assets you choose to take in the divorce could have a big impact on your tax bill.

  • For example, imagine that you get real estate in your divorce decree. Real estate has many taxes, including:
    • Property taxes. You will be fully responsible for these after the divorce. You can’t go to your ex and expect him or her to contribute to the property taxes.
    • Taxes on rent. If the property is an investment property that you rent to others, then you will be responsible for paying taxes on the rent you collect
    • Capital gains taxes. If you choose to sell the asset in the future, then you will need to pay taxes on the increase in value. Capital gains tax will be based on the difference between what the asset was originally worth and what you got when you sold it.

    Gift taxes do not usually apply if a transfer is made pursuant to a divorce decree or a property settlement agreement incorporated into a divorce decree. However, there might be situations where the gift tax comes into play, so this is another concern couples should consider in a high net worth divorce.

    You also need to be aware of early withdrawal penalties for retirement accounts, if you need to cash out an account before reaching age 59 ½ . There are ways to get around this penalty, so meet with an attorney.

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Family Law

Attorneys for Divorce, Child Custody & More At the Lawrence Law Office, we are committed to helping families in conflict find creative solutions that focus on addressing their goals and...

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Columbus & Delaware, OH Divorce Lawyers In Ohio, there is more than one way to separate from your partner and dissolve your marriage. A divorce is typically a contested proceeding, with each side...

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When working through your divorce with an Ohio family law attorney, chances are your divorce agreement made allowances for child support. spousal support or

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divorce

Dividing the marital assets between divorcing people can be one of the most contentious issues during the entire divorce process. Ohio law allows the couple to work together with...

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Dividing the marital assets between divorcing people can be one of the most contentious issues during the entire divorce process. Ohio law allows the couple to work together with...

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Helping With Child Custody, Visitation & Support Updates Or Modifications Sometimes circumstances substantially change after a divorce and require parents to revisit an existing...

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