Wednesday, April 21, 2010
Willis: "Property Transfers Incident to Divorce: the End of a Nightmare, the Opening of Two Loopholes"
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.