Getting divorced can lead to a brighter future after you get over the initial shock of no longer being married. But the way that your divorce is settled could have a dramatic impact on your life. In divorces involving property transfers and other high value assets, it is critical that you have an experienced family law attorney representing you.
This is because there are many tax implications that can be associated with divorce settlements. Learn more about what tax implications could affect you in your divorce when you schedule your consultation with an experienced Manassas divorce lawyer at Olmstead & Olmstead. Contact our office at 703-361-1555 with specific concerns or questions.
Transfers as True Sales
When you are going through a divorce that involves high value assets, it may be more beneficial for you to treat certain property transfers as true sales as opposed to divorce transfers. It can be difficult to say when property transfers should be done as true sales. But your attorney will look into the value of the property in question, what your realized gains might be on the property, and how long the spouse receiving the property intends to hold onto it to determine which is the best option for your divorce settlement.
Property Transfers and Prenuptial Agreements
When you have an existing prenuptial agreement, you should not run into issues with property transfers, as these transfers were already predetermined in your prenuptial agreement. However, if you attempt to transfer property more than one year after your divorce has been finalized, you may have trouble proving that the property transfer was related to your divorce.
If this happens, both spouses could suffer tax implications. If you hope to avoid this issue, your attorney can ensure that your divorce settlement accurately outlines all planned property transfers to avoid any of these adverse tax penalties.
Potential Tax Implications of Property Transfers During Divorce
After your divorce has been finalized, you should already be prepared for any potential tax implications. There are several potential tax implications you could face when transferring property during your divorce. It all depends on which assets are transferred, how much they are valued at, what your tax exemptions are, what payments you’ve made, and what your financial status is post-divorce.
Some property transfers may have more challenging tax implications than others. For example, if you and your spouse shared rental property, and you were awarded the property in your divorce settlement, you will need to take into consideration the tax implications associated with being a landlord and owning rent or property.
Working to Resolve Your Virginia Divorce
Virginia is an equitable distribution state. This means that your marital assets will be divided fairly in your divorce. But that does not mean that they will be divided equally. When you have high value assets, you need to take steps to protect the things that matter most to you in your divorce.
It is in your best interest to work with your soon-to-be ex-spouse in order to come to an arrangement that works for both of you. Many divorces are contentious. They wind up costing divorcées substantially more. If you hope to get your divorce finalized sooner with fewer costs, it is important that you and your spouse work together to come to the terms of your settlement. This includes your transfer of properties and other valuable assets.
You will usually have up to one year from the date that your divorce is finalized to get your property transferred to your ex without either party having to face tax implications. If you have additional concerns about how your taxes could be affected by property transfers in your divorce that almond, reach out to an experienced divorce attorney in Manassas.
Contact a Virginia Divorce Lawyer
There are sometimes serious tax implications that come with getting divorced. But you can take steps to avoid these tax implications by working with a reputable attorney to work through the terms of your divorce settlement.
Protect yourself and your finances when you contact an experienced Manassas divorce lawyer at Olmstead & Olmstead. Schedule your initial case review when you complete our online contact form. Or give our office a call at 703-361-1555 to get started on your case today.