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Andrew J. Jordan, CPA, MSF is a licensed Certified Public Accountant. He achieved a successful career as a CPA, Financial Manager and Consultant for a variety of large and small businesses. Andrew is experienced in creating value for companies in industries ranging from staffing and professional services, retail automotive dealerships, manufacturing and real estate. He also has over 25 years experience assisting individuals and businesses with income tax planning and compliance. Andrew holds a Bachelor of Science degree in Business Administration from Wayne State University in Detroit, MI and a Master of Science in Finance from Walsh College in Troy, MI. His graduate education included significant elective study in Taxation. His services include: Accounting, Tax and Advisory Services. Visit andrewjordancpa.com for more information.

Saturday, November 5, 2016

Taxes and Divorce

If you’re going through a divorce I don’t need to tell you it’s a significant emotional and financial event. The last thing you may have on your mind is how the breakup will affect your taxes. Most people think that their divorce attorney is going to take care of things. However if your divorce attorney does not have a tax background only basic thought will be given to the tax planning.


Areas that I have seen people make costly mistakes are in the transfer of retirement assets. Not structuring the split of a 401(k) and other retirement assets with a qualified domestic relationship order (QDRO) or other tax related provisions in the divorce decree can have severe tax consequences.

Not all marital assets are created equal. Some assets can be worth more than others based on the amount one will receive after tax. Especially if the plan is to sell or distribute the asset shortly after the divorce is finalized. Careful analysis of marital assets with “built-in taxable gains” can also provide some area for reasonable negotiation in the property settlement.

Divorce can be a very costly proposition that one sometimes has no control over. The natural reaction is to try and minimize the cost. However without thoughtful planning it can be much worse than it needs to be. You may not be concerned how tax efficient the divorce is settled, however it’s better to know the tax consequences so one can make an informed decision.

Andrew J. Jordan, CPA, MSF, CGMA

The information provided is not intended as a substitute for legal or other professional services. Legal or other expert assistance should be sought before making any decision that may affect your situation.

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