{"id":54,"date":"2011-01-24T21:16:16","date_gmt":"2011-01-24T21:16:16","guid":{"rendered":"http:\/\/scoresbyfamilylaw.com\/blog\/?p=54"},"modified":"2019-11-23T22:26:44","modified_gmt":"2019-11-24T05:26:44","slug":"tax-implications-in-dividing-assets","status":"publish","type":"post","link":"https:\/\/scoresbyfamilylaw.com\/blog\/2011\/01\/24\/tax-implications-in-dividing-assets\/","title":{"rendered":"Tax Implications in Dividing Assets"},"content":{"rendered":"<p><a href=\"http:\/\/scoresbyfamilylaw.com\/blog\/wp-content\/uploads\/thumbnailCARWSVQ0.jpg\"><img decoding=\"async\" class=\"alignleft size-full wp-image-751\" title=\"thumbnailCARWSVQ0\" alt=\"\" src=\"http:\/\/scoresbyfamilylaw.com\/blog\/wp-content\/uploads\/thumbnailCARWSVQ0.jpg\" width=\"300\" height=\"200\" \/><\/a>In negotiating agreements to divide assets in a divorce, husbands and wives should take care to consider the tax implications involved. For example, if the parties agree that Husband will be awarded his $100,000 401k in exchange for Wife\u2019s being awarded the house equity valued at $100,000, this agreement may be much more favorable to Wife than to Husband once the tax consequences are considered. The 401k is a tax-deferred asset, while the house equity in most circumstances will be a tax-free asset. After considering the income taxes Husband will eventually pay on the 401k, Husband may be receiving an asset that is worth only $60,000 to $70,000 after taxes, hardly equal to the $100,000 in tax-free house equity Wife is receiving.Capital gains taxes must also be considered. If a couple purchases stock for $25,000 during their marriage and it has appreciated to a value of $100,000 at the time of their divorce, this stock, although valued at $100,000, will be worth less when it is sold and the $75,000 gain is taxed at capital gains tax rates.Before signing on the dotted line, it is wise to run the tentative settlement terms by a CPA or other trusted financial advisor who can evaluate the fairness of the potential settlement after accounting for taxes.<\/p>\n<p>Copyright \u00a9 2011 by Scoresby Family Law \u2013 J. Kyle Scoresby, P.C. All rights reserved.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In negotiating agreements to divide assets in a divorce, husbands and wives should take care [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":751,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[117],"tags":[],"class_list":["post-54","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-post-decree-division-of-assets"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Tax Implications in Dividing Assets - Arizona Divorce &amp; Family Law Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/scoresbyfamilylaw.com\/blog\/2011\/01\/24\/tax-implications-in-dividing-assets\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tax Implications in Dividing Assets - Arizona Divorce &amp; 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