Atlanta, GA asked in Divorce and Tax Law for Puerto Rico

Q: Hello! Will the money received by ex spouse as divorce settlement be taxed?

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3 Lawyer Answers
Andrew M Steiger
Andrew M Steiger
  • Tax Law Lawyer
  • St. Clair Shores, MI

A: In general, the 2017 TCJA changes the tax laws related to divorce in some key respects. The tax aspects of a property settlement did not change where property changes hands at the time the divorce is finalized. But be careful of receiving property with a built in tax gain where the value exceeds the property’s tax basis. One area where the law did change for divorces finalized beginning in 2019 is for alimony payments. Alimony payments are no longer deductible for the payor and taxable for the recipient. Hopefully your divorce lawyer understands the tax laws and the recent changes to maximize the tax benefits to you and the value that you receive in the event of divorce. If not, you it is probably a good idea to consult a tax attorney to analyze your property and and any potential taxes that could result, especially if IRAs or 401(k)s are involved in the settlement.

Bruce Alexander Minnick agrees with this answer

Nelson Jose Francisco Alvarez-Aponte
  • Carolina, PR
  • Licensed in Puerto Rico

A: Hello and thank you for using JUSTIA. A divorce settlement in Puerto Rico is not taxable per say but if a capital gain is created or the income of said spouse is affected then yes said gain is taxable as income .

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