What are the tax implications for a military divorce?

In Washington, military divorce can present a unique set of tax implications. Generally, the first thing to consider is whether any military retirement pay will be divided between the spouses as part of the divorce. If so, the court may order the transfer of a portion of the service member’s military retirement pay to the other spouse. For the service member, this may mean a decrease in their net retirement pay. In addition, the Internal Revenue Service (IRS) considers alimony payments to be taxable income. This means that the spouse paying alimony cannot take a deduction on their taxes, while the spouse receiving alimony must report the income as taxable income. Other potential tax consequences of a military divorce include a decrease or loss of certain military benefits due to a change in marital status and a decrease or loss of tax deductions. Additionally, the capital gains tax for the sale of a residence may be impacted by a military divorce, as it is generally possible for the service member to transfer their interest in a residence to the other spouse as part of the divorce. It is important to note that the tax implications of a military divorce vary based on individual circumstances. Consultation with a tax professional or military lawyer is recommended to determine the potential tax implications of a military divorce.

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What are the tax implications for a military divorce?

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