Unfriendly Tax Ramifications for Same Sex Couples Who Divorce
July 8, 2016
The last several years have seen significant progress in equal rights for same-sex couples to get married throughout the country. With these great gains comes some welcome simplicity for same-sex couples who choose to divorce, but for those whose legal relationships were civil unions or domestic partnerships, the situation can still be a bit complicated. The law has yet to extend all the same tax exemptions enjoyed by married couples to those in non-marriage unions.
If a same-sex couple seeking to dissolve their relationship has been joined in a civil union or domestic partnership, they may be facing some tax liabilities their married counterparts will not. Often in the course of a divorce, asset division involves one party paying the other some sum of money as property settlement or alimony. When unmarried couples make these kinds of exchanges, they are exposed to potential tax liabilities.
Whereas a married couple would receive tax exemptions for divorce-related financial transactions, those who have not entered into a legal marriage are not offered the same protection from tax liabilities for these transfers of money or property. Potentially, these transactions may be viewed as gifts come tax time, or they may need to be reported as income by one partner or the other.
Divorce is widely recognized to be one of the most stressful life events that one can experience, but it should not be needlessly devastating financially as well as emotionally. An experienced divorce attorney can help ensure that divorce proceedings remain fair and professional, and help you on your way to starting a new season of life.