Divorce Tax Consequences – Form 8332 | Eugene, Oregon Lawyers - Arnold Law in Eugene, Oregon – Powerful Advocacy. Proven Results.

Divorce Tax Consequences – Form 8332 | Eugene, Oregon Lawyers

12.10.2015 – by Adam Shelton, Eugene Divorce Attorney

An Oregon divorce attorney needs to know about the multitude of tax consequences and repercussions of a divorce. Some of those consequences are immediate, such as choosing whether to file jointly or separate income taxes (and strategically when to file a dissolution). Others have great and more lasting effects, such as capital gains and losses from the disposition of property or business interests, or examining spousal support’s tax consequences.

At Arnold Law, our Eugene-based divorce attorneys utilize the expertise of tax experts and frequently have them testify at trial to help present evidence, educate the family law trial judge on the tax consequences of her decisions, and sometimes even advocate on behalf of our clients. This tool and understanding of the tax code is critical regarding the division of property and assigning support.

federal-tax-divorce

Generally speaking, Federal law provides that spousal support (or “alimony” as it is referred to in other jurisdictions) can be written off by the Payor and is counted as income for recipient. However, this is not the case with child support, which has no current tax consequence under Oregon or Federal Law, Another frequent issue that a client may face is how to assign the dependency exemption and why the Court might assign that to one parent or the other. That is where the the Form 8332 consequences come into play. Your family law lawyer should be able to explain to you the federal tax consequences.

Federal Divorce Taxes with Support and Real Property

Often, an inexperienced family law or divorce lawyer may not know enough tax law to be able to properly advise their Oregon divorce clients on the tax consequences of a divorce. For example, while most attorneys may be able to give advice on the simple tax consequences of paying or receiving spousal support, few attorneys understand the implications of offsetting property awards in lieu of more or less spousal support. For example: a Husband may opt to pay MORE than the normal spousal support to a Wife in exchange for being able to keep more of the marital assets. There may be very real tax consequences associated with choosing that option in a case, the Attorneys at Arnold Law are well-versed with properly valuating spousal support offsets and advising clients accordingly.

In a divorce, many spouses who owned more than real property (either jointly or separately) may be forced to part with one or more of those properties in order to reach an equitable distribution of the estate. There are different tax consequences associated with the sale of conventional “marital residences” versus the sale of rental properties, and clients need to understand the risks and rewards of being awarded one or the other.

The divorce attorneys at Arnold Law are able to anticipate the issues that have long-term consequences, such as the tax issues.  Call 541-338-9111 or fill out the form to the left or live chat to the right.

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To read more about the issues in an Oregon divorce, click here.

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