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Full-Text Articles in Law
Back To The Future: Marriage And Divorce Under The 2017 Tax Act, Mark W. Cochran
Back To The Future: Marriage And Divorce Under The 2017 Tax Act, Mark W. Cochran
Faculty Articles
The Tax Cuts and Jobs Act of 2017 (the 2017 Tax Act) significantly altered the federal tax consequences of marriage and divorce by mostly eliminating the so-called "marriage penalty" from the individual income tax rates and abolishing the deduction for alimony payments. These changes represent the latest congressional tinkering with issues that have persisted since the earliest days of the modem income tax, turning back the clock with regard to taxation for both married and divorced couples. For the first time, since the enactment of the Tax Reform Act of 1969, the rate brackets for married taxpayers filing joint returns …
Taxing Compensatory Stock Rights Transferred In Divorce, Gregg Polsky, Kathleen Delaney Thomas
Taxing Compensatory Stock Rights Transferred In Divorce, Gregg Polsky, Kathleen Delaney Thomas
Scholarly Works
Stock-based compensation has become increasingly prevalent in recent years. As a result, many high net worth divorces now result in the transfer of compensatory stock rights from the employee spouse to the nonemployee spouse as part of the marital settlement. Despite this growing trend, the tax consequences of these transfers have not yet been explored fully. This Article endeavors to fill this void and explain both the planning opportunities and potential pitfalls in transferring compensatory stock rights in divorce. These transfers can shift ordinary income from a high-bracket spouse to a lower-bracket spouse, creating a tax surplus that enlarges the …
Alimony Treatment For A Single Payment, Douglas A. Kahn
Alimony Treatment For A Single Payment, Douglas A. Kahn
Articles
Before 1942 alimony paid to a former spouse was not included in the spouse’s gross income. In 1942 Congress adopted the antecedent to section 71. Although an alimony recipient must recognize gross income, section 215 provides the payer with a nonitemized deduction for the payment. Therefore, the alimony tax provisions provide a congressionally approved income-splitting arrangement which can benefit the parties by shifting income from a high-bracket taxpayer to one in a lower tax bracket. The parties can divide the resulting savings between them by altering the amount paid to the former spouse.
Simplifying And Rationalizing The Federal Income Tax Law Applicable To Transfers In Divorce, Deborah A. Geier
Simplifying And Rationalizing The Federal Income Tax Law Applicable To Transfers In Divorce, Deborah A. Geier
Law Faculty Articles and Essays
This 2002 article explores the tax consequences of transfers in divorce and suggests how the tax consequences can be both simplified and rationalized. This article was written as an "Academic Adviser" to the Joint Committee on Taxation in connection with a study mandated by Congress on the overall state of the Federal tax system (June 2000 through April 2001) and was first published at JOINT COMMITTEE ON TAXATION, STUDY OF THE OVERALL STATE OF THE FEDERAL TAX SYSTEM AND RECOMMENDATIONS FOR SIMPLIFICATION JCS-3-01, VOLUME III (ACADEMIC PAPERS), April, 2001, at 19.