Your divorce process may feel like you are drinking water from a fire hose – information is coming out in a fast and furious way!
And when you have a business to divide, the “water” gets faster and murky.
But there is hope when you use the collaborative divorce process.
By utilizing this divorce process, couples can divide their business in a fair way that is agreeable to both.
Collaborative and mediation professionals, such as financial neutrals, can help provide services such as business valuations and assistance in dividing the income, assets and debt streams that are generated by the business respectfully and fairly.
Another way these professionals can help is to share how your taxes will be affected when there is a business division.
Here are a few ways your taxes will affect your business due to the divorce process:
- Utilizing the Tax-Free Transfer rule can help asset gains not be taxable – check with your neutral financial expert on how to accomplish this
- Using a qualified domestic relations order (QDRO) can help protect your 401K transfers from taxation
- Make sure you work out how dependents will be handled, who will claim them, and what each spouse’s tax filing status will be; i.e., head of household – this can help avoid tax surprises down the road
- California is a community-property state – this will dictate how business allocations will be handled
Determining the value of your business and dividing the value can be challenging during a divorce, but when you have a team of collaborative divorce experts helping you and your spouse, the process will go quickly and be less costly and stressful.
Our team at Family Divorce Solutions is a group of well respected, experienced and trained attorneys, mental health professionals, financial professionals, certified public accountants and child specialists who work as a team to reach a complete and satisfactory resolution for everyone involved.
Contact us today to see how we can help you and your spouse navigate through the divorce process!
Note: This information is general in nature and should not be construed as legal/financial/tax/or medical advice. You should work with your attorney, financial, medical or tax professional to determine what will work best for your situation.