Divorce Property Settlement Tax Pitfalls – Hiding won’t Help. Divorce and Taxes Part III

Divorce property settlement tax pitfalls can be an unpleasant post-divorce surprise. Hiding, unfortunately, won’t make the problem go away.

Marital property transfers to one spouse or another during or related to a divorce generally don’t bring tax consequences. However, like most generalities, there are always exceptions.

In Part I of this series, I talked about your divorce dream team. I suggested that, along with an experienced divorce lawyer like those at Hightower Reff law, a tax attorney or a CPA may be a valuable part of your divorce team. Possible divorce property settlement tax pitfalls are yet another reason to consider enlisting a tax pro during your divorce.

Divorce Property Settlement Tax Pitfall 1 – Selling the House 

You must report gain or loss from the sale of jointly owned property on your taxes in the tax year of the sale. Your individual state’s law determines what your share of that gain or loss amounts to. This is another area that can get sticky, and where a tax attorney or CPA can be helpful.

If you sell your primary home when you’re no longer married, watch out. Your tax basis on the capital gain is different than it would have been when you were married. Married couples filing jointly can exclude up to $500,000 of gain from the sale, while single tax filers can only exclude half that amount, at $250,000.

When the Primary Residence Exclusion Doesn’t Count

One of the most common divorce property settlement tax pitfalls happens when a divorcing couple keeps the family home in both of their names after the divorce. It’s often so one spouse can live there with the children until they’re grown.

The spouse who no longer has the house as their primary residence often ends up with an expensive tax consequence when it’s sold years later.

 

IRS Publication 523, Selling Your Home, is a helpful read that includes special rules you should know if you’re separated or divorced and selling a main home.

The non-recognition rule – isn’t always recognized

Usually you don’t pay taxes on division of marital assets because of divorce. That’s because the “non recognition rule” doesn’t recognize a gain or loss on property transfer between spouses or former spouses (so long as the transfer between former spouses is because of divorce.)

However, there are some circumstances in which the IRS considers a property transfer as a gain by one spouse – which means it’s taxable.

 Non-taxable transfers

Some other things you may not think of that you can transfer without tax consequences during or incident to a divorce (under definition of IRS regulations):

  • Health savings account (HSA)
  • Archer medical savings account (MSA)
  • Individual retirement arrangement (IRA)   (stay tuned for more on this)

Next in the series

Next time in the final installment of Divorce and Taxes, we’ll have a look at key points to know about retirement account division roadblocks when it comes to your tax bill.

(If you missed Part I or Part II of the series, you can catch them here.)

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 

Author, Hightower Reff  Partner Attorney Tracy Hightower, holds both a Juris Doctor and  a Master of Laws in Taxation. For more about Tracy, visit her profile page.

If you need help with an Omaha area divorce or other Omaha family law case, contact Hightower Reff Law today and come visit with one of the attorneys at the Omaha office

 

Divorce and Taxes Part I – Four Things to Think About

There’s an old saying that only two things are certain – death and taxes. Thinking about both is usually about as unpleasant as sucking a lemon. Tax consequences of divorce are also a certainty, and can be equally as sour. Unpleasant as it may be, divorce and taxes go hand in hand. That means tax consequences of divorce are a key component to consider when mediating or negotiating your divorce settlement.

In this series we’ll look at some of the key tax issues to think about during your divorce. Having some information going into the process can help gain the clarity you need to have informed conversations with your attorney and your CPA to help them protect your interests.

Your divorce dream team

If you have substantial assets, your divorce dream team should have both substantial legal and financial knowledge. An expert team will give you the best chance of minimizing the negative tax consequences of divorce.

Your team should include an experienced divorce attorney, like ours at Hightower Reff, as well as a tax attorney or an experienced CPA.

When you choose collaborative divorce instead of traditional divorce, a financial expert is routinely a member of your collaborative divorce team, and can help with planning for your divorce and taxes.

First steps – filing status and figuring out a plan

 

For more on filing status and divorce, see IRS publication 504 [LINK TO https://www.irs.gov/publications/p504/ar02.html#en_US_2016_publink1000175818].

Watch for Divorce and Taxes Part II

Next time in the series, in Part II, we look at possible support payment tax pitfalls you may not have pondered when it comes to paying or receiving spousal support or child support.

 

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


Author, Hightower Reff  Partner Attorney Tracy Hightower, holds both a Juris Doctor and  a Master of Laws in Taxation. For more about Tracy, visit her profile page. 

If you need help with an Omaha area divorce or other Omaha family law case, contact Hightower Reff Law today and come visit with one of the attorneys at the Omaha office

Countdown to Cameras in Nebraska Courts – New Rule Starts March 2017

The countdown to cameras in Nebraska courts is on. If you’re in a Nebraska district or county court after March 1, 2017, you may see a new thing in our State – news cameras inside the courtroom doors.

Nebraska is joining many other states, including Iowa, that have had cameras in their trial courtrooms for years. States like Nebraska, however, have been hesitant to allow electronic recording in courtrooms.

What the new Nebraska rule says

The new Nebraska Supreme Court Rule allows electronic cameras in Nebraska courts, recording and social media posting from the courtroom. But don’t show up at your local courthouse with a video camera or your smartphone looking to become a YouTube correspondent.

Only approved news media outlet representatives with approved equipment are allowed to record or report electronically from the courtroom. Anyone looking to provide expanded coverage under the rule has to ask for permission in advance, using a specific written form.

Under the rule, a judge can approve someone outside the approved list of media outlets who asks to take part in providing coverage in the courtroom. However, everyone looking to report from court must follow the rule’s written request and approval requirements.

There are other restrictions to cameras in Nebraska courts as well:

 

The rule doesn’t require expanded media coverage, it only allows for it. Not every Nebraska judge will allow expanded coverage in their courtroom, and the decision is up to their discretion.

The case for and against cameras in the courtroom

Cameras in Nebraska courts and other electronic recording in the courtroom have long been a hot topic of discussion.

On one side of the issue, those opposed say that the expanded coverage brings with it a risk of making witnesses afraid to testify and jurors afraid to serve, making a mockery of the judicial system, or tainting potential jurors’ opinions of a case.

There’s also concern that it may change the way a judge communicates with attorneys and his or her staff during a proceeding, cause a distraction, or disrupt the courtroom.

While some of those arguments are compelling, state courts that have allowed cameras in the courtroom have kept their expanded coverage rules – maybe for very good reasons. Some believe expanded coverage is important to the public interest.

Those in favor of expanded courtroom coverage say it gives people who otherwise may not ever go into a courtroom as close to a first-hand court experience as possible. They believe that look inside the courts can be a teaching mechanism to give people a better understanding of how our judicial system works, and increase their confidence in the courts. There’s also an argument that cameras in the courtroom supports the public’s “right to know” what happens in our judicial system.

If you think cameras in Nebraska courts will be an issue for you

If you have a case coming up in a Nebraska court that isn’t in one of the excluded categories in the infographic above, the question of cameras in the courtroom may hit close to home.  You should talk with your attorney so you’re both prepared if you think your case might attract media attention.

Media making a request for coverage must do so via a special form. They have to send the form request to the Judge and all attorneys. If you don’t have a lawyer, they have to send a copy to you. The judge will decide whether to approve the request. Depending on the type of hearing the media wants to cover, you may be able to object if you choose.

If you want to object to a media request for expanded coverage in your hearing or trial, you or your lawyer has to file a written objection. Be aware, however, there’s a time limit to file your objection. Also, it must be sent to all parties, and to those requesting to cover the hearing.

 

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


For details about the author, Susan Reff – a Hightower Reff  Partner Attorney practicing in criminal defense, DUI, and family law –  visit her profile page.

Find out more about how Susan and Hightower Reff can help with your criminal case. 

If you need help with a DUI, criminal defense, or family law case, contact Hightower Reff Law todayand come visit with Partner Attorney Susan Reff or one of our other experienced attorneys at the firm’s Omaha office

Illegal Search and Seizure – Know What to do if it Happens to You

officer with evidence bagOne of my clients recently “walked” after a special unit of the Nebraska State Patrol trained in drug enforcement caught him with about $40,000 worth of illegal drugs. Was it fancy lawyering that got him off? Well, I think it was good lawyering, but that’s not all.  My client went free from the felony drug charges against him because of laws that protect us all, and because of his smart moves during the police encounter leading to his arrest. It’s important to understand, however, that the laws that set my client free aren’t intended to protect the guilty. Rather, they are to protect the innocent – to protect us all. That’s why, when it comes to illegal search and seizure, you should know what to do if it happens to you.

Illegal Search and Seizure – It Could Happen to You

We’re all guaranteed Constitutional protections from government intrusion on our privacy — innocent and guilty alike. With few exceptions, the police can’t legally bother you with a stop, or search you, unless there’s a credible reason to believe you’re breaking the law (ie. probable cause). But can’t and won’t are two different things.

As we’ve seen in the news, despite laws against unreasonable search and seizure, it still happens. Whether or not you think you’re doing something illegal, this is stuff everyone should know. After all, it’s not only guilty people who are subjected to unlawful police searches. It could happen to you, too. While most of the law enforcement officers I know are good cops who don’t purposefully violate citizens’ rights, everyone makes mistakes sometimes.  Law enforcement officers are no different.

Why my client walked

In the recent Douglas County, Nebraska, felony drug case in which my client “walked” instead of serving what could have been a lengthy prison sentence, it happened because the court threw out the evidence against him. All of it.

I made a motion to the court and the judge agreed with me. He refused to allow into evidence the tens-of-thousands of dollars worth of drugs the State Patrol seized from my client’s suitcase, or anything else found during the search. The judge suppressed the evidence because he agreed that it came from an illegal police search. That meant the prosecutor had no choice but to drop the felony drug charges.

I won that Motion to Suppress for my client because law enforcement violated his Constitutional rights with an illegal search. They stopped him without a good reason and they searched his bags without a warrant when there was no exception allowing them to do it. That rendered the evidence they got during the search inadmissible.

I also won because, during the stop, while the Nebraska State Troopers were violating his rights with an unlawful search, my client made the right moves.

What my client did during the stop that was smart

Pay attention to this part. I’m going to tell you exactly what my client did that helped him walk out of the courthouse after being caught with tens of thousands of dollars worth of drugs.

  1. He didn’t run from police when they approached him
  2. He didn’t argue, resist or obstruct during the encounter

It’s pretty simple stuff, but it’s not always easy. Emotions can run high during a police encounter, especially if you feel like they’re violating your rights. In my client’s case, staying calm and cooperative and not arguing or telling the troopers how to do their jobs (like they’d listen anyway) paid off for him. Had my client done any of the above, his case could have ended much differently.

How you can be smart too

If law enforcement stops you, whether or not a search follows, the best things to do to help yourself and your lawyer down the road (should the need arise) are:

 

 

 

If the police perform an illegal search and find evidence, a good lawyer will try to have it suppressed so it can’t be used in court. If the search was without a warrant, there may be a chance your lawyer can find a legal argument to give you some leverage in court.

Don’t make it harder on your lawyer by doing something during the cop encounter that could end up making an exception to the warrant rule, clock more charges on your docket, or give the prosecution something to use against you in court.

Remember, you aren’t going to settle any disputes over your rights there on the scene. Those will all have to be hashed out in court later. All you are likely to accomplish by resisting police or arguing with them is to make more trouble for yourself.

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


For details about the author, Hightower Reff  Partner Attorney and criminal defense lawyer Susan Reff, visit her profile page.

Find out more about how Susan and Hightower Reff can help with your criminal case. 

If you need help with a criminal defense case, contact Hightower Reff Law todayand come visit with Partner Attorney Susan Reff at the firm’s Omaha office

Using GPS to Track Your Spouse During Divorce – Forbidden or a Free-for-all?

cell phone tracking and gps trackingUsing GPS to track your spouse during divorce – or tracking them via their cell phone – is a relatively new thing. Beware however, digitally tracking your spouse is a legally dicy deed.

If you think your spouse is digitally sleuthing you, there are some things you can do.

Using GPS to track your spouse – forbidden, frowned upon, or a free-for-all? 

This month marks the five year anniversary of the first Supreme Court Case to address protection of our privacy rights against digital age government intrusion. In that case, the government used GPS without a warrant to track a suspected drug dealer. The Supreme Court decided government use of GPS tracking is a “search,” that triggers Constitutional protections of our privacy.

However, when two private citizens are involved (like using GPS to track your spouse), and there’s no government action at issue, the rules are different. Sometimes those rules aren’t so clear.

To track or not to track? 

In a Nebraska divorce case or other Nebraska family law case, (or in criminal court) the Judge is likely to view recording sound or images of people differently than only tracking whereabouts of a vehicle.

Not long ago, a Nebraska woman involved in a domestic relations case sewed a recording device into her four-year-old child’s teddy bear. As a result, the court ordered her to pay quite a bit of money in damages, plus attorney fees and costs, for violating her ex-husband’s privacy.

Clearly, if you’re considering using GPS to track your spouse, or tracking your spouse via their cell phone, you should consult with an attorney. Ideally, that attorney should have deep experience in both family and criminal law. Here at Hightower Reff, we practice in both areas of law – family law and criminal law. That means when a client’s question crosses practice area boundaries, we can give them a quick, knowledgeable answer.

Ownership is key

In general, in Nebraska, if you’re thinking of installing a GPS unit on a vehicle to track the vehicle’s movements, make sure your name is on the title. If you’re thinking of using an app for cell phone tracking, make sure it’s through a device on your account.

In Nebraska, you could also hire a private investigator to do spousal surveillance for you. Most PI’s in Nebraska use electronic surveillance after they’ve watched the subject enough to establish a pattern of behavior.

If there’s a protection order against you however, paying someone else to follow your ex for you isn’t likely to play well with a Judge (to say the least).

Foreseeable fails 

Beware – using GPS to track your spouse during a divorce (or otherwise) could put you in hot water. Depending upon the situation between you and your spouse, and how you go about monitoring his or her movements, you could run afoul of harassment or stalking laws.

Additionally, if there’s a protection order in place against you, tracking of any sort is an automatic no-go.

Also, emotions are often intense during a divorce. If your spouse finds out what you’ve been up to, your digital detective work may make bad feelings between you and your soon to be ex-spouse even worse.

Tracking cost-benefit analysis

Another thing to consider if you’re thinking of using GPS to track your spouse, or tracking them via their cell phone, is whether the value of information you may get is likely to be worth the risk. If you’re considering using the information in court during your divorce or other family law case, talk to your attorney about whether it’s likely to be admissible.

Consider also that, even if the Judge lets in the evidence, you could be the one who comes out looking the worst. It may appear that you have control issues, are unreasonable – or you’re just a jerk.

All states aren’t the same

Keep in mind that Nebraska law is different from laws of some other states, so this information may not apply elsewhere. Also, whether tracking or surveillance of a certain nature is legal can change depending on what, if anything, is recorded.

It’s always best to consult with a trusted attorney licensed in your jurisdiction before you do something that may get you in hot water. This is especially true when it comes to something that could have criminal penalties – like GPS or cell phone tracking or surveillance.

Protecting your own digital privacy during divorce – what you can do

While you’re considering going modern-day Inspector Gadget, your spouse may have already beat you to the electronics store (or website, or app store.. or to your phone). But there are some things you can do to protect your privacy from digital disruption during your divorce.

 

 

If you think you’ve been tracked (digitally or otherwise), tell your lawyer. She or he can ask written questions of opposing counsel to find out whether your spouse or anyone acting for them has used cell phone tracking or monitoring, GPS, or the services of an investigator.

If you find out your spouse or someone acting for them hired an investigator, your lawyer should subpoena the investigator and get every last bit of information they’ve dug up about you. If your spouse un-truthfully denies hiring an investigator, they can’t use any information from the investigator in court.

 

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


For details about the author, Hightower Reff Attorney Scott Hahn, visit his profile page.

More information about Hightower Reff’s divorce practice is available here.

If you need help with a Nebraska divorce, contact Hightower Reff Law today and visit one of the attorneys at the Omaha office. 

Nebraska Misdemeanor Charges – 6 Things you Need to Know (Infographic)

nebraska-misdemeanorsIf you’re kicking off the new year with Nebraska misdemeanor charges hanging over your head, a bit of knowledge and clarity about the court process may help you feel more at ease.

There are seven classes of misdemeanors in Nebraska. They run the gamut in possible sentences – from only a relatively small fine to a rather hefty fine and jail time.

Regardless of the misdemeanor charge, the process you’ll go through is the same, except with a DUI. Although the court process is the same for a misdemeanor charge of driving under the influence of alcohol or drugs, there’s also a Nebraska DMV process you’ll have to deal with.

 

Appeals

If you’re convicted of Nebraska misdemeanor charges, you may be able to appeal. However, you must have legal grounds for your appeal.

In an appeal, the higher court looks at the legal process that led to a conviction. The appeal can also address other issues like an excessive sentence.  However, an appeal isn’t a chance to present new evidence. That’s not allowed. The appellate court will only consider the trial court’s record and the parties’ appellate briefs.

Figuring out whether you have appealable issues can be complicated. You need the advice of a trusted attorney to guide you before you waste a lot of time and money. If the court sees your appeal as frivolous, it’ll be dismissed and you’ll be out of luck – and probably quite a bit of money.

It may surprise you to learn that even if you entered a plea, you may still have grounds for an appeal. Appellate practice can be complicated. As with your case, your best bet is to have a lawyer guide you in the appeals process.

Get Help with Nebraska Misdemeanor Charges Early

The best thing you can do if you’re accused of a Nebraska misdemeanor (or any crime) is to get experienced legal help fast. You can hurt my power to help you as a criminal defense lawyer if you do something to damage your case before I get onboard.

It’s best to consult with your lawyer before speaking with law enforcement or making a move of any sort.

 

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


For details about the author, Hightower Reff  Partner Attorney and criminal defense lawyer Susan Reff, visit her profile page.

Find out more about how Susan and Hightower Reff can help with your criminal case. 

If you need help with a criminal defense case, contact Hightower Reff Law todayand come visit with Partner Attorney Susan Reff at the firm’s Omaha office

Nebraska Child Custody Relocation – Guide to Removal Cases

childcustodyrelocationIf you’re contemplating a move out of Nebraska with your child in the coming new year and you have a custody order in place, you’ll have to get the court’s permission beforehand. As the name of this article implies, these kinds of cases are called Nebraska child custody relocation, or removal cases.

Nebraska child custody relocation cases can be tricky. These are some basics to help make more clear how Nebraska child custody relocation cases work:

 

 

No temporary orders

Temporary orders allowing you to remove your child from the jurisdiction aren’t allowed in Nebraska. That’s why there’s a faster litigation process and final hearing than in a typical family law litigation case. A faster final hearing allows families to get on with their lives as quickly as possible.

Your contribution is key in your Nebraska child custody relocation case

Whether you’re the parent requesting the move, or the one opposing it, the more evidence your lawyer can show the court to support your position, the better your chances of winning. You play a key role in your lawyer’s ability to do that. You know your circumstances and your child best and can best help your lawyer understand the key elements that he or she will need to prove to the court.

It’s especially important that you communicate well with your attorney and work side by side with them during your Nebraska child custody relocation case. That will enable them to have all the key information about your situation and present it to the court.

Get a lawyer experienced in Nebraska child custody relocation onboard ASAP

Removal cases can be hard to win. It takes an experienced attorney to navigate the sometimes murky waters of Nebraska law when it comes to proving to the judge whether moving away from their other parent is truly in your child’s best interests.

Because things usually move quickly in removal cases and in the circumstances that typically surround the need for an out of state move, it’s important to get a lawyer experienced in Nebraska child custody relocation cases on board as soon as you find out an out of state move is on the horizon – whether you’re the parent moving, or the parent on the other side of the case.

 

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


For details about the author, Hightower Reff  Partner Attorney Tracy Hightower, visit her profile page.

More information about Nebraska child custody removal cases is available here. 

If you need help with a Nebraska child custody relocation or other family law case, contact Hightower Reff Law today and come visit with one of the attorneys at the Omaha office.