Participants will learn how to apply, implement, and evaluate the strategic tax aspects of marital dissolutions and living together arrangements. Current perspectives on property transfers and asset divisions are examined with an emphasis on planning considerations. This mini-course reviews property settlements and other transfers incident to divorce. Basis allocation, third party transfers and purchases between spouses are also examined. Common pitfalls for the unwary such as transfers in trust, installment notes, and purchases between spouses are analyzed. Application of these tax principles is exampled in selected asset divisions of the residence, business interests, insurance, and pension benefits.

Learning Assignment & Objectives

As a result of studying the assigned materials, you should be able to meet the objectives listed below.

ASSIGNMENT

At the start of the materials, participants should identify the following topics for study:

• Property rights
• Premarital agreements
• Application of §1031
• Incident to divorce
• Property basis
• Purchases of residence between spouses
• Purchases of business interests between spouses
• Selected asset divisions of residence & business interests
• Real & personal property
• Pension benefits

Learning Objectives

After reading the materials, participants will be able to:

1. Inform clients on the various forms of marital property and how to proceed with a tax structured property settlement pointing out the benefits of premarital agreements to avoid potential divorce problems.
2. Demonstrate a working knowledge of property settlements under §1041 by explaining:
   a. its application to interspousal and third party transfers,
   b. the factors that determine whether or not a property transfer is incident to divorce under §1041,
   c. property basis for the transferor and transferee spouse under §1041.
3. Discuss and suggest remedies for the deferred tax pitfall of §1041 by:
   a. describing the deferred tax liability of interspousal purchases,
   b. explaining the tax deferral of §1031 exchanges,
   c. listing the key elements of the home sale exclusion and how to apply it;
   d. pointing out benefit distribution problems and the tax advantages of QDROs.

Revision Date: 1/30/24

Additional Contents : Complete, no additional material needed
Advance Preparation : None
Intended Participants : Any CPA looking to maintain or enhance their professional competence
Course Declaration : Participants must complete the final examination within one year of purchase. A minimum passing grade of 70% or better is required to receive CPE
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