Property Transfers Incident to Divorce: the End of a Nightmare, the Opening of Two Loopholes
Steven J. Willis
University of Florida - Levin College of Law
January 6, 2005
From 1987 until 2002, the assignment of income doctrine applied to property transfers incident to divorce. Since Revenue Ruling 2002-22 was issued, the doctrine has not applied. This article argues that the revenue ruling is poor public policy and it should be revoked. It effectively results in the deductibility of child support and alimony without restriction. As a result, the ruling effectively repeals two important statutory constraints.
For practitioners, however, this can be very beneficial, as it gives substantial tax benefits to some divorcing couples.
Keywords: divorce, tax, property division
JEL Classification: H20, H24
Date posted: April 14, 2010