Divorce Tax Planning

Divorce has significant tax implications that require careful planning. As both an Attorney and CPA, Philip Falco provides comprehensive guidance on the tax consequences of divorce — ensuring you do not leave money on the table or trigger unexpected tax liabilities.

Tax Consequences of Divorce

Property division, alimony, child support, retirement account distributions, and real estate transfers all carry tax consequences that can significantly impact your financial outcome. The difference between a tax-aware settlement and a standard one can be tens of thousands of dollars.

• Property division — transfers between spouses are generally tax-free under IRC 1041, but subsequent sales trigger capital gains
• Alimony — tax treatment depends on the date of your divorce agreement
• Child support — not deductible and not taxable income
• Retirement accounts — QDROs must be properly structured to avoid early withdrawal penalties
• Real estate transfers — basis allocation, exclusion of gain, and timing all matter

Filing Status and Exemptions

Filing status changes, dependency exemptions, and the timing of divorce finalization all affect your tax liability. Your filing status on December 31 determines your status for the entire year — making the timing of your divorce critical from a tax perspective.

Working with Your Divorce Attorney

We work with your divorce attorney to ensure tax-optimal structuring of settlement agreements. Many divorce attorneys lack deep tax expertise, and many CPAs lack legal knowledge. As both, Philip Falco bridges that gap.

Post-Divorce Asset Protection

Asset protection during and after divorce is critical. We help structure post-divorce asset protection plans to safeguard your assets going forward, including trusts, entity structuring, and retirement planning.

Contact Us

Call (303) 626-7000 or email Phil@ColoradoLegal.com for divorce tax planning.