The Unknown of the New Tax Code
December 4, 2017 § 4 Comments
As I write this Congress is in the throes of crafting revisions to the federal tax code that will have far-reaching impact on domestic litigation. For instance, I have heard that the child-dependency exemption is being considered for elimination, and even deductibility of periodic alimony has been on the chopping block. Whether or not those particular provisions end up being affected, there are hundreds of others that could be, and that could directly impact your clients.
We not only do not know what substantive changes will be made, but we do not know when they will go into effect, and we do not know how existing contracts and judgments will be affected.
This might be a good time to suggest to your clients to put the brakes on negotiating divorce terms until the dust clears. Then, it would be prudent to sit down with a competent CPA to get some guidance about what difference changes in the law will make in your advice to your clients. It might also be a good idea to come up with and insert some disclaimer language in your PSA’s in which your clients acknowledge that the advice you have given is against the backdrop of a possibly drastically changing legal landscape.
Or, it may prove to be yet another Washington chimera. Just pay attention.