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Posts from the ‘Tax Implications’ Category

What is the most important tax impact resulting from divorce?

For many couples the most important taxation issue resulting from Divorce is in regards to Spousal Support. The payor of spousal support may deduct any spousal support paid from their income taxes while the recipient must add into their income and pay taxes any spousal support received. This does not apply to child support which is not tax deductible in any circumstances.

In cases where spousal support is not an issue but there is an equalization of net family property which includes a transfer of RRSPs or a matrimonial home it... MORE »

Can my legal expenses be deducted from my income taxes?

In the majority of cases legal expenses cannot be deducted against your income taxes. There are however a couples of situations in which you can deduct your legal expenses from your income tax.

The most significant case where legal costs incurred can be tax deductible is in the cast of legal fees incurred to obtain child support or spousal support. This includes fees incurred in regards to obtaining an order for child or spousal support , fees paid in order to enforce an existing order for child or spousal support or... MORE »

If I receive a large payment of support arrears do I need to pay taxes?

Maybe, if the arrears are in regards to child support then it is never deductible by the payor. When receiving lump sum spousal support which represents an arrears of periodic payments you sometimes will need to pay taxes and this will depend on the judge. In situations in which a settlement payment has been made instead of the full amount, it is less likely that you will need to pay tax (more likely it will not be tax deductible to the payor).

However, another mechanism called income averaging may be available... MORE »