Is retirement possible, post-divorce?

Taxing Obligations

No one likes to talk about taxes. Everyone hates the IRS. That’s a given.

Another given: You want to pay the absolute least amount of taxes that the law allows. That’s on you. Your obligation. If you don’t plan well, and end up paying a lot more in taxes, the IRS will be, well, delighted.

Now add “divorce” into this mix, and what was already complicated (want to check out the latest editions of the federal or Arizona tax codes?) becomes really complicated.

In working with women like you, I can safely say that people don’t want to necessarily understand taxes, but they most definitely want a professional to review their situation and ensure that there are no surprise taxes.

I’m certainly a pro. I’m a CPA, a Certified Financial Planner™ professional, and a Certified Divorce Financial Analyst® professional. And I’m divorced, too.

Nerd alert: There’s a lot of jargon coming. I’ll try and be gentle, but the bottom line, which affects your bottom line, is that you really, really want a financial pro like me on your team, in addition to your attorney.

Here goes:

The IRS code states that transfers between spouses pursuant to a divorce are non-taxable.


This means, in English, if your husband transfers into your name, say, half of an asset that’s in his name, you don’t have to pay taxes on it.

So even though you’re getting something of value, the IRS doesn’t regard it as the kind of thing it would normally tax, such as income or a capital gain (like the sale of stock that’s increased in value since you bought it).

But what you do now can come back to bite you in the future, sometimes years down the road. I can help you with things like this.

For example, let’s talk about the house. As you know, real estate values have been going up a ton lately. What you might not know is that the tax law is written so that you and your husband can still co-own a house and sell it, as joint owners, even after the divorce. Why would you want to do this? Well what’s called the “exclusion of gain from sale of principal residence” is $500,000 for co-ownership… but only half of that if it’s not.

In other words, I could see a potential pitfall like this, looming, while you’re still in negotiations, and save you literally tens of thousands of dollars in tax liability in the future. All with the change of a simple clause which I could help your attorney to write.


There’s lots of other stuff like this. A security held in a brokerage account, for example, gets taxed at your normal tax-bracket rate if you hold it for less than a year—but if you hold it for a year and a day, it gets taxed at 15 percent. If you’re lower-income, it could be taxed at zero percent.

There are things like “capital loss carry-forward from the previous year,” and the very real difference between IRS “custody” of children and “legal decision-making (formerly known as ‘custody’)” in Arizona… it just keeps on going.

I could explain the nerdy details to you. But I know that you likely don’t want me to. You just want me to help you make the best-informed decisions for your situation, today and into the future, so that you get zero tax surprises, and pay the least amount you legally can.