Surgent's How to Avoid Getting Burned in a Divorce: Tax Traps/Tricks/Plan

 

   

 

 
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Overview

8.0 Credits

The purpose of this course is to explore the practical tax and financial issues that arise as a result of divorce or separation. The course is crucial for practitioners who are seeking solutions to benefit both parties.

Objectives

  • Describe the general issues of divorce, including alimony, property settlement, and child support;
  • Explain the basic role the CPA plays in the divorce process and the relationship with other professionals;
  • Identify the specific documents for analysis, including tax returns, business records, and other sources;
  • Discuss the fundamental federal tax rules applicable to alimony and child support;
  • Distinguish alimony payments from payments for child support, focusing first on how to qualify payments for alimony tax treatment and the extent to which payments will be accorded child-support treatment;
  • Explain how the divorcing spouses may determine which spouse gets the federal tax exemption in respect for dependent children;
  • Explain when a transfer of property is treated as a property transfer and the tax treatment of such transfers;
  • Recognize the qualification of transfers as nonrecognition transactions both for income and gift-tax purposes;
  • Discuss assignment of income and the special problems associated with the transfer of benefits in qualified plans and IRAs;
  • Identify the criteria that must be met to render an order a qualified domestic-relations order (QDRO) and describe the tax consequences that follow without a QDRO;
  • Identify the issues relating to the potential exclusion of the future sale of the principal residence when couples divorce;
  • Discuss when and to what extent continuing housing costs are deductible as such or as alimony;
  • Discuss the problems and planning opportunities that can be addressed in a premarital agreement;
  • Identify the questions of public policy, unconscionability, fraud, and disclosure that apply to a premarital agreement;
  • Analyze the limitations with respect to specific assets, such as professional licenses, qualified plans, and nonqualified deferred compensation;
  • Explain what filing status is available to the spouses during and after divorce proceedings;
  • Discuss the potential liabilities of a spouse for the taxes of the other spouse with an emphasis on innocent-spouse relief; and
  • Describe the deductibility of costs incurred in connection with a divorce.

Major Topics

  • Filing status -- Joint returns versus married filing separately
  • Alimony -- What traps to avoid
  • Child support issues
  • Dependency exemptions and who gets them
  • Innocent spouse relief -- The final regulations
  • Property settlements -- How to make them "tax smart"
  • The personal residence -- Best structuring techniques
  • Retirement plan balances -- Knowing what to do and what not to do when structuring qualified domestic reduction orders
  • Antenuptial agreements -- Planning from before day one

Designed For

Practitioners who wish to learn more about the many tax and financial issues surrounding divorce
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