With the exception of child custody, the distribution of marital property is arguably the most important aspect of a divorce agreement. When considering division of assets, remember that what looks equitable on the surface may not be. One major reason is tax liability.
Typically, any transfer of marital property to one spouse that occurs as a result of a divorce settlement is not taxable at the time of transfer. However, any taxes due after the sale of assets or income earned from investments after the divorce will be paid solely by the spouse who was awarded the asset.
Let’s take a look at two areas of tax liability that come into play: income taxes and capital gains taxes. Read More