Posts Tagged ‘division of marital property’

TEMPE AND MESA ARIZONA DIVORCE AND FAMILY LAW LAWYER COMMENTS ON COMMON TAX ISSUES

Thursday, May 3rd, 2012

Arizona Divorce And Family Law Tax Issues Must Be Considered Year Around By Attorneys and Parties

In dealing with hundreds of divorce and family law cases, parties and even many lawyers often forget to include provisions regarding common tax treatment. These important financial issues should not be overlooked.  As the April tax deadline for 2011 is behind us, we must nonetheless continue to look at 2012 and future tax years in all settlement and trials.

The most common issues is the claiming of the children for tax exemptions.  Under the federal Internal Revenue Service (IRS) rules, the parent with whom the child resides the greater part of the year is entitled to claim the child as a general rule.  The Federal IRS rules do, however, allow for the State Court divorce judge to make a different allocation.  Under Arizona family law, the statute requires that in most cases the Judge must divide the claiming of the children proportionate to income.  As far as the IRS goes, this is taken care of by the use of form 8332 which can be found online or obtained through a tax preparer.

It is to the benefit of both parties to consider who will benefit most from the tax exemption.  In some cases in which one party will receive a substantially greater advantage than the other party, one party can be permitted to claim the child every year in exchange for an increase or decrease in child support.  This would be done by agreement of the parties and should be included in an Order signed by the Court.

Another common issue is whether to file jointly or separately.  It is often financially advantageous to file jointly, though in high conflict cases the difficulty in working together toward a common goal may outweigh the financial advantage.  The total tax return can be divided equally in some cases.  In other cases, it is more fair to calculate the two returns separately, and then determine how to split the incremental increase in the refund if the parties file jointly.  Talk with your tax preparer or CPA regarding filing jointly or separately, and work with your divorce or family law attorney to ensure that your agreement is written in such a way to maximize your tax benefit.

There are tax advantages to being able to file as the head of household.  Generally this can be claimed by the parent with the child the majority of the time.  If divorcing couples have more than one child, they may each be able to claim at least one child as the head of household.  This should be reviewed by your tax preparer or CPA, and worked through with your divorce and family law attorney.

In some cases, it may be advantageous to file single, rather than married filing separately.  Even if your divorce case has not concluded, there are specific rules that when applicable may allow a party to file a single.  These rules include maintaining a separate residence for all of the past six months of the taxable year, and maintaining over half of the cost of maintaining the home.  You should work through these issues with your tax preparer or CPA, and work with your divorce lawyer to ensure that any agreements or court orders permit you to file as you have been advised by your tax professional.

Because the tax issues can be complex, you should ensure that you work with an experienced family law attorney or divorce lawyer.  If you are involved in a divorce or custody case, and are looking for experienced representation involving tax issues or other complex issues, please call 800 899-2730 and ask to speak with attorney Douglas C. Gardner, or visit our website at yourarizonadivorcelawyer.com.

East Valley Family Law Lawyer Discusses Division Of Businesses In Divorce

Wednesday, April 6th, 2011

Arizona law requires the equitable division of community property and jointly owned property. Even in cases where the property is the sole and separate property of one spouse, the law in certain instances recognizes that the other spouse may have an equitable interest in the property for any increase in value attributed to the finances or effort of the marital community during the marriage. Generally, equitable division requires an equal division, though there are certain exceptions where an unequal division may be most equitable or fair.

In many divorce or legal separation cases, one or both parties own a business, medical practice, or other professional practice. Generally these businesses or practices were started and built during the marriage, though in some cases the business was started prior to the marriage and has increased in value during the marriage.

In each such case, both spouses have a legal and/or equitable interest in the business, and the value of the business must be equitably divided as part of the divorce case. Often, the business will need to be valuated or appraised. There are many issues that arise including the type of appraisal, the date of the appraisal, whether the appraisal includes the goodwill value of the business or only the tangible assets, etc.

These are complex cases, in which an experienced and knowledgeable attorney is imperative. If you are contemplating a divorce, or are already involved in a divorce, and you would like to speak with an attorney who has handled many complex divorce cases involving the division of businesses, please call McGuire Gardner today for a free initial telephonic consultation. Call us at (480) 829-9081, or visit us at YourArizonaDivorceLawyer.com.

Division of Marital Property/Debts- Don’t Get a Cookie-Cutter Outcome

Monday, April 26th, 2010

Arizona law requires the “equitable” division of marital property and marital debts during a divorce. Generally this is intended to be an “equal” division, though there are some cases in which an equal division may not be a fair (or equitable) division.

Specifically, Arizona statute provides that the Court may consider “excessive or abnormal expenditures and the destruction, concealment, or fraudulent disposition of property.” A.R.S. § 25-318(C). Additionally, the Courts may properly consider “other factors that bear on the equities of a case.” Inboden.

For example, the Courts may consider the “length of the marriage; the contributions of each spouse to the community, financial or otherwise; the source of funds used to acquire the property to be divided; the allocation of debt; as well as any other factor that may affect the outcome.” Inboden.

Courts are trained to equally divide property in each case, as this is what occurs most frequently. Accordingly, if you believe that it would be fair that you receive a larger share of the marital property to make the division a fair division, you will need experienced legal counsel to present your case and convince the Court that your case is unusual and deserving of a different outcome than the cookie-cutter divorce that the Courts are accustomed to.

Please feel free to contact McGuire Gardner today to speak with an experienced family law attorney about your unique case.