In a recent post, we discussed the income tax treatment of alimony payments. For Springfield residents, who are going through a divorce or who were divorced last year, there are other significant tax implications. One of these is the capital gains tax and its impact on the divorce property division.
When assets are transferred between the parties to a divorce, the IRS does not treat the transfer as a taxable event. But, when a spouse who receives an asset in the divorce later sells that asset, he or she may be liable for capital gains tax on the sale.