For business owners, a divorce can trigger uncertainty and turmoil that may have profound effects on their lives and livelihood. Business owners and professionals who are facing marital separation can take three steps to prepare for the divorce process. Read my article for the October 2017 issue of Pittsburgh Magazine: http://www.pittsburghmagazine.com/Pittsburgh-Magazine/October-2017/Is-Divorce-Interfering-with-Your-Family-Business/ The article contains tips […]
In family law proceedings, tax consequences come into play in two different ways. First, when a spouse transfers value to the other spouse as property or alimony, they must anticipate and control the triggering and allocation of income tax liability. Secondly, taxation affects the net value of assets and income that may change hands in a divorce. Clearly, a certificate of deposit and a 401(k) account, each containing the same nominal dollar amount, must not be treated as equivalent. Chapter 6 of Frumkes & Vertz on Divorce Taxation (all new!) discusses the tax consequences of valuation and net income in divorce and support proceedings.
Doctors who participate in a physician incentive compensation plan featuring a forgivable loan must be cautious in how they handle the tax reporting on their income tax returns, particularly if they bail out and have to pay a clawback to the employer. A recent decision of the U.S. Tax Court, Salloum v. Comm’r., T.C. Memo […]
Could a change in tax law increase the value of family businesses in divorce? A new IRS regulation that was proposed in the fall of 2016 might have that effect. So far, the stiff resistence of forensic accountants and lawyers has prevented the new rule from going into effect. Whether that will continue remains to […]
When a dental practice divorce valuation is used to divide marital property, the valuation might not apply for other purposes. That’s the conclusion reached by a federal bankruptcy court recently when deciding whether to approve a Chapter 13 restructuring plan in which the dentist would pay 22 cents on a dollar to creditors, including his ex-wife. When […]
Schank v. Comm’r of Internal Rev., T.C. Memo. 2015-235 (2015) Terry and Paula Schank were the owners of TMS&P Holdings, LLC, a Nebraska limited liability company that elected partnership treatment for tax purposes; and Twin City Roofing and Sheet Metal, Inc., a closely held C corporation, in which Terry Schank was employed full time as […]
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