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Getting Divorced? Beware of Hidden Tax Traps as You Divide Assets

The article from Kiplinger discusses the tax implications and potential pitfalls when dividing assets during a divorce. It highlights that while splitting assets might seem straightforward, the tax consequences can be complex and costly if not handled correctly. Key points include the tax treatment of retirement accounts like IRAs and 401(k)s, where withdrawals can be taxable; the basis in assets like stocks or real estate which affects capital gains tax; and the division of property where one spouse might end up with an asset that has a lower tax basis, leading to higher taxes upon sale. The article advises consulting with tax professionals to navigate these issues, ensuring an equitable division that considers both the immediate and future tax liabilities. It also touches on the importance of understanding the tax implications of alimony, child support, and the potential for tax deductions or credits that might be affected by the divorce settlement.

Read the Full Kiplinger Article at:
[ https://www.kiplinger.com/retirement/getting-divorced-beware-of-hidden-tax-traps-as-you-divide-assets ]