In the beginning of a relationship you aren’t likely to put your name on the inside cover of all your books, or make a list of which dishes belong to who. As your relationship progresses, it is relationship leads to a walk down the aisle; it is a sure bet that your DVD collections will share shelf space. If your marriage ends in separation or divorce, what then do you do if you are unable to determine what property belonged to which person before the marriage?
When you file for divorce and have to figure out a plan for distribution of assets, keep in mind that in Florida the distribution is equitable. To make that distribution easier when trying to classify assets as either separate or marital, the following tips are useful:
There seem to be a few things in life you can just never escape. Death and taxes. Even when divorcing, you have to look at the value of your assets through the eyes of the IRS. This is important because in many divorce cases, assets are liquidated to satisfy the terms of property distribution. But, there could be tax implications depending on what you liquidate and how your assets are valued.
For example, liquidating a 401(k) or other retirement account to pay your spouse their part of property division could have immediate tax implications. For example:
- Early withdrawal of funds from a 401(k) often carries an additional 10% tax penalty.
- The funds you receive from the distribution are considered income and must be reported as such when you file your income tax return.
Depending on the type of account you liquidate, there may be… Continue reading