The financial markets have recovered dramatically since the financial crisis of 2008-2009. If you and your spouse have been relatively passive investors in stocks, bonds and mutual funds since that time, there may be significant capital gains liabilities hidden within your accounts. If those assets need to be sold as part of a divorce settlement, you may owe sums in the tax year in which those sales occur depending on the unique nature of the individual asset. However, there may be ways to minimize your capital gains taxes or avoid having to pay those liabilities when your divorce becomes final or sometimes before it becomes final.
We Understand Capital Gains Taxes And Divorce
Lake Toback in Chicago is a team of attorneys with extensive experience in divorces involving complex property division issues. Having represented many high net worth clients as well as middle-income clients with investment assets, we understand the capital gains tax aspects of dividing marital property. When we represent you, we will work diligently to obtain the best possible divorce settlement for you — a settlement that takes into account capital gains tax liabilities and other critical considerations. We often work in conjunction with accountants and tax experts in certain situations.
Avoiding Capital Gains Pitfalls
A simple example shows the potential pitfalls of unrealized capital gains tax liabilities. Let's say that you and your spouse own $250,000 in stocks that are subject to equitable division. Roughly half those stocks are currently valued somewhere close to their purchase price while the other half have risen in value significantly since they were purchased. If the divorce settlement transfers the stocks with gains to you, you may have to pay the taxes on the gain when the stock is sold.
At Lake Toback, we will work closely with your broker or asset manager to achieve the result that will have the most beneficial tax result possible given the circumstances of your case.
Our lawyers will take these and other aspects of your situation into consideration when negotiating your divorce settlement. You can be assured that we will protect your rights and interests at all times.
Contact Our Firm
To learn more about capital gains tax and divorce, contact Lake Toback.