Divorce Settlement Tax Obligation
If I accept a complete cash settlement for a divorce. What would be my tax obligation percentage for 30,000 to 50,000 dollars? I wonder because this money was already taxed on W-2s when earned originally.
2 Answers from Attorneys
Re: Divorce Settlement Tax Obligation
Your question is mostly a federal tax question of which is not my field. For Arizona income tax purposes, the result most likely will be the same. Arizona essentially follows the federal tax treatment.
Re: Divorce Settlement Tax Obligation
This is why you hire a Federal Tax attorney. If you structure this properly, with the assistance of your spouse, it will have a negligable tax effect. If on the other hand, you fail to structure it, then if falls under, Internal Revenue Code 61 (b)(10), and as income under 61(a).
We in the profession of tax attorneys use the tools of categorization to lawfully minimize the tax position of our clients. For more info on how to minimize your tax situation, call me at 866 2950047.
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