RESOLVING DIVORCE ISSUES (T/G 104) covers the early warning signals indicative of disharmony on tax matters, child dependency, property disclosures, alimony payments, living apart, and the resolution thereof through separate maintenance arrangements, property settlement agreements and separate tax returns before engaging an attorney. Also covered:

• When "tax deemed" unmarried
• Tracing separate properties
• Custodial parent presumptions
• Sale of residence "fractioning"
• Transferee basis burdens
• Deferring remarital commingling

Resolving Divorce Issues
Book: 104
Table of Content

1.  WARNING SIGNALS                             1-1
    
    Examine Your Latest 1040                    1-2
    Joint 1040 Means Co-Liability               1-3
    Now, Your “First Signal”                    1-4
    Emergence of Cunning Spouse                 1-6
    Intentional Underwithholdings               1-7
    How to Find Out                             1-8
    Skipping Estimated Prepayments              1-9
    Omitting Substantial Income                 1-11
    Exaggeration of Deductions                  1-13
    Intercepting Tax Refunds                    1-15
    Destroying Tax Notices                      1-15
    
2.  PREPARATORY MATTERS                         2-1

    Tax Equality of Spouses                     2-2
    Never Inform on Spouse                      2-3
    Gather Prior Tax Returns                    2-4
    Gather Tax Notices & Records                2-7
    “What Can Happen” Example                   2-7
    Protest When Right                          2-9
    Deeds & Escrow Papers                       2-10
    Sequester “Your Share” Only                 2-12
    Necessary Legal Proceedings                 2-15
    Precautions with Attorneys                  2-16
    Separation of Tax Issues                    2-19

3.  MARITAL STATUS                              3-1

    Tax Code Section 7703                       3-2
    Four Possible Tax Filings                   3-3
    When Filing Required                        3-5
    Married Filing Separately                   3-7
    Married Living Apart                        3-8
    When “Deemed Unmarried”                     3-10
    IRS’s “Forcing” Stance                      3-12
    Filing as Single Persons                    3-14
    Head of Household Status                    3-15
    Changing Filing Status                      3-16

4.  SEPARATE RETURNS                            4-1

    A “Don’t Do Joint” Example                  4-2
    Simplest Option: Married Separate           4-3
    “Living Apart” Tax Problems                 4-4
    A “Do-It-Yourself” Option                   4-5
    Your Best Option: SMO                       4-8
    Tax Contents of SMO                         4-9
    Making Proper Allocations                   4-11
    Allocation Example 1                        4-14
    Allocation Example 2                        4-15
    Allocation Example 3                        4-16
    Treatment of Spousal Support                4-17

5.  INNOCENT SPOUSE RELIEF                      5-1
    
    Overview of Section 6015                    5-2
    Is There: Understatement of Tax?            5-4
    How “Innocence” Determined                  5-5
    A Convincing Example                        5-6
    Now, to Form 8857                           5-9
    What the Instructions Say                   5-10
    What is “Equitable Relief”                  5-12
    Separate Liability Election                 5-13
    Recap of Options                            5-14

6.  CHILD DEPENDENCY                            6-1

    The Dependency Exemption                    6-2
    Dependent Child Defined                     6-3
    If Over Age 19                              6-4
    “Total Support” Defined                     6-5
    Illustrative Example                        6-7
    Maintaining a Household                     6-9
    Custodial Parent Presumption                6-12
    Release of Claim to exemption               6-13
    Difficulties with Form 8332                 6-15
    Form 2038 Questionnarie                     6-16
    Separate Child Support Order                6-17

7.  ALIMONY PAYMENTS                            7-1

    Only Cash Payments Count                    7-2
    How Deducted/Included                       7-4
    What Qualifies as “Alimony”                 7-5
    Time Duration of Payments                   7-6
    Must Exclude Child Support                  7-8
    “When in Doubt” Examples                    7-9
    Must Exclude Property Settlement            7-11
    Lump-Sum Settlements                        7-12
    A Brazen Example                            7-14

8.  PROPERTY DISCLOSURE                         8-1

    Key Reference Dates                         8-2
    Separate Property Interests                 8-3
    Tracing Separate Property                   8-4
    Agreement on Separate Property              8-6
    Overview of Marital Property Items          8-7
    How Value Ascertained                       8-9
    Consolidation Procedures                    8-12
    Importance of “Cash Pool”                   8-13

9.  PROPERTY SETTLEMENT                         9-1

    The Ideal Exemplified                       9-2
    Seldom Pure: Mostly Impure                  9-5
    Section 1041 Overview                       9-9
    Treatment as Gift(s)                        9-11
    Meaning of “Incident to Divorce”            9-12
    Transfers “For Benefit of” Spouse           9-13
    How One Court Ruled                         9-16
    Settlements Preceding Divorce               9-19

10. TRANSFEREE BURDENS                          10-1

    Text of Section 1041 (b)                    10-2
    The Mandate: Basis Carryover                10-3
    Transferor’s “Basis” Explained              10-5
    Transferor’s Obligation (Supposedly)        10-7
    Example: No Basis Records                   10-9
    No Basis; No Section 1041                   10-11
    Critique of “Susan” Case                    10-12
    Vigilance by Transferee                     10-13
    Demand Gift Tax Return                      10-15
    The Marital Residence                       10-17

11. FOLLOWUP MATTERS                            11-1
    
    Immediate Post-Divorce Review               11-2
    Likelihood of IRS Audit                     11-3
    Head of Household Status                    11-5
    Claiming Dependency Exemptions              11-7
    Evidence of Alimony Paid                    11-8
    Evidence of Alimony Received                11-9
    “Split Sale” of Residence                   11-11
    Reporting on Schedule D (1040)              11-14
    Treatment of Rental Property                11-15
    Notify Banks, Brokers, Payers, Etc.         11-18
    Trusts, partnerships, & Corporations        11-19

12. REMARITAL ASPECTS                           12-1

    The Prelude: Singles Together               12-2
    Joint Returns Spell Trouble                 12-4
    Filing Status Options                       12-5
    Importance of Prenuptial Agreement          12-6
    Sample Prenuptial Wording                   12-8
    Case of Imprudent Commingling               12-10
    “Theft” of Premarital Residences            12-12
    Deferred Commingling Plan                   12-14