


Christina Rowe opted for her ex-husband’s share in their house instead of alimony after he spent a month in jail for skipping child support. Rowe figures that, over time, the move saved her about $20,000 in taxes.
Tax tips aren’t thrown around a lot during divorces, when emotional grenades are more likely to be tossed. But estranged spouses can save a lot by working together calmly on alimony, the sale of the house, income-tax filing status and timing of the divorce.
“Smart people say ‘I hate you, but I hate the Internal Revenue Service more,’ ” says Diana L. Mercer, an attorney and divorce mediator at Peace Talks Mediation Services in Playa del Ray, Calif., and co-author of the book Your Divorce Advisor.
Every divorce is different, so ignore anything that seems like blanket tax advice. It’s important to consult a good advisor, perhaps a lawyer or CPA, for the best approach.
In the case of Rowe, the trade-off between alimony and the house worked out. She would have had to pay tax on alimony because it is considered taxable income, but she didn't owe anything on the share of the house because property can be transferred tax-free in a divorce settlement. What saved taxes in her circumstances might not apply to others, however.
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What Others Have Shared ()
I had no idea
Thank you. This really helps. I have several friends that I am going to call about this.
Mary
Foolish Me
Well ... its too late now (for me), but this is certainly the kind of thing this site is getting known for. Help from one another for one another. I go on here every day now.
From the golfer (Greg Norman) to Lucy Taylor what a ride these stories give.
Sally
I wonder how much I got screwed?
Not blaming anybody ... I'm just wondering if I could have helped myself if I had gotten help during the divorce when I was undoing things.
Does anyone know if you can go back and review (or maybe even re-open things)?
Ashley
Any way we can educate
Any way we can educate ourselves about this- then so much the better.
CM
Great Advice
This is really something that you can pass along to those about to head into the realm of divorce.