Pennsylvania Divorce Law...

Pennsylvania Law - May the Court Consider Tax Issues.

The court may consider tax issues both in setting alimony and in dividing the property.

The tax issues that arise most frequently are:

• Tax that would be paid if securities or mutual funds were sold.
• Tax that would be paid if the family home were sold.
• The deductibility of alimony to the payer and inclusion in income of the recipient.
• The non-deductibility of child support and non-inclusion in income of the recipient.
• The income tax exemption for a child, which sometimes may be given to either parent.

Section 3502(a)(10).

Cases:

Smith (1995) 653 A.2d 1259, 439 Pa.Super. 283 (The husband and wife each received shares of the husband's pension in the divorce. The court considered the pre-tax value of the pension. The husband claimed that the court should have deducted income tax. The court declined to deduct income tax in figuring the relative asset values available to each party. This is because the pension had not started to be distributed yet, and even after it is distributed, the amount of income tax would depend on all the other sources of income and deduction over the rest of the parties' lives. As a result, the tax effect was speculative, not known. Because it was speculative, the court declined to consider it.)

Email this page on to a friend.

Disclaimer: We are not giving legal advice. No warranties. We disclaim all legal liability. More...

Click here to go to top Pennsylvania divorce law page.

Click here for the Pennsylvania divorce legal table of contents.