Divorce Transfers & Settlements - Mini CourseCode: 25-DIVORCE2

64 pages
Course description and objectives:

Participants will learn how to apply, implement, and evaluate the strategic tax aspects of marital dissolutions and living together arrangements. Current perspectives on property transfers and asset divisions are examined with an emphasis on planning considerations. This mini-course reviews property settlements and other transfers incident to divorce. Basis allocation, third party transfers and purchases between spouses are also examined. Common pitfalls for the unwary such as transfers in trust, installment notes, and purchases between spouses are analyzed. Application of these tax principles is exampled in selected asset divisions of the residence, business interests, insurance, and pension benefits.

Course Objectives:

After reading the materials, participants will be able to:

1. Inform clients on the various forms of marital property and how to proceed with a tax structured property settlement pointing out the benefits of premarital agreements to avoid potential divorce problems.

2. Demonstrate a working knowledge of property settlements under sec.1041 by explaining:

a. its application to interspousal and third party transfers,

b. the factors that determine whether or not a property transfer is incident to divorce under sec.1041,

c. property basis for the transferor and transferee spouse under sec.1041.

3. Discuss and suggest remedies for the deferred tax pitfall of sec.1041 by:

a. describing the deferred tax liability of interspousal purchases,

b. explaining the tax deferral of sec.1031 exchanges, 

c. listing the key elements of the home sale exclusion and how to apply it;

d. pointing out benefit distribution problems and the tax advantages of QDROs.

Presentation Method: QAS Self-Study

Category: Taxes

CPE credit: 2 Hours

Program Level: Update

Prerequisites: None

Advance Preparation: None

Exam expiration date: Participants must submit exams for grading within one year from the date of purchase