Page 12 - Family Law Services
P. 12
Division of Property and Related Tax Effects .................................................................................................. 67
IRC Section 1041 .......................................................................................................................................... 67
Community Property Law............................................................................................................................. 67
IRC Section 66 .................................................................................................................................................. 68
Taxation of the Sale of Personal Residences ................................................................................................ 68
Allocation of Income, Deductions, Credits, and Payments in the Year of Divorce ..................................... 69
Allocation of Basis, Carryforwards, and Other Tax Attributes .................................................................... 71
Dependency Exemptions .............................................................................................................................. 73
Child Tax Credit: IRC Section 24 ................................................................................................................. 74
Child and Dependent Care Credit ................................................................................................................. 74
Education Credits .......................................................................................................................................... 74
Medical Expenses for Dependent Children ...................................................................................................... 76
Stock Redemptions in Divorce ......................................................................................................................... 76
Taxation of Stock Options ................................................................................................................................ 78
Nonqualified Options .................................................................................................................................... 78
Incentive Stock Options (Qualified Options) ............................................................................................... 79
Other Tax Issues for Stock Options and Deferred Compensation in Divorce .............................................. 80
Taxation of Retirement Proceeds ...................................................................................................................... 81
IRAs, Simplified Employee Pension Plans, and Savings Incentive Match Plans for Employees .................... 82
Nonqualified Plans ............................................................................................................................................ 82
Conclusion ............................................................................................................................................................ 83
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