How can we negotiate divorced spouse benefits under current Social Security rules?
Under Social Security rules as amended in November, 2015, a divorced spouse may not claim divorced spouse benefits unless the worker spouse is also claiming benefits. (The divorced spouse benefit is 50% of the worker spouse’s benefit, and applies only if the parties have been married for 10 years or more, the divorced spouse is […]
Can we value Social Security as a defined benefit pension?
Yes, we can. Conceptually, there is no difference between Social Security and a defined benefit pension. Both are a stream of payments that may increase with inflation, begin at a certain age, and continue until the recipient dies. Both may have annual increases. For Social Security, this is the annual inflation adjustment. For defined benefit […]
How do I handle derivative social security benefits?
There are two categories of Social Security benefits received by children. 1. Social Security payments based on the parent’s status. The parent must be disabled (the usual case in a divorce context); or retired and entitled to Social Security; or a parent who died after working long enough at a job where he paid Social […]
What if a spouse is going to take half the other spouse’s social security?
The software only allows a spouse to enter their own Social Security. To enter a situation where Party B is taking half of Party A’s Social Security, please do the following: 1. On the Income, in the section for income other than wage income, find the line for Social Security income and click “more info”. […]
The Social Security income projection seems off. Why?
Be sure to indicate that the amount you enter is “per month” or “per year,” as appropriate for your case. If you entered a monthly amount, but the program is treating it as “per year,” it will be insignificant in the charts. Also: If the client won’t be age 62 (or 67 or whatever retirement […]
How can I find the present value (PV) for spousal support (the lump sum buyout amount)?
There are two ways to get the present value calculation: (1) If you have already entered the parties’ income and expenses into the software; or (2) If you have not. We will describe each of these approaches. 1. If you have already entered the parties’ income and expenses. Go to where you enter the spousal […]
Can a party who does not live in the marital residence claim the mortgage deduction for it?
In general, a party must live in a residence in order to claim the mortgage deduction for it. For more information, see IRS publications 504 and 936. In Publication 936, search for the definition of “qualified home.” An exception may apply if the title is in joint names and the payer is obligated to pay […]
How do I enter rent for a party who is paying rent?
You can enter it where you enter expenses. There will be a Real Estate section, and you will see a button to enter “Tenant expenses.”
How can I more precisely account for the tax on sale of real estate?
The Sale of Real Estate Report shows an estimated tax amount. But this is only a rough estimate, made by applying a marginal capital gains tax rate to the taxable gain. It will not reflect a situation where the gain causes a change in tax bracket, or the impact of the alternative minimum tax, or […]
How do I enter responsibility for the mortgage shifting from one party to the other?
Here is how to specify that Party A is taking the mortgage over from Party B after, for example, four years: 1. Set Party B as initially paying the mortgage. 2. On the “more info” screen for the mortgage, specify that Party B will make a balloon payment in the amount of the balance at […]