With alimony non-deductible post-2018, restructure as property transfers, HSA/IRA splits, and unallocated support.
Since 2019, alimony is neither deductible to payor nor income to recipient. Strategies to recapture the pre-TCJA benefit: (1) shift payment via §682 alimony trust (see separate strategy), (2) front-load property transfers via §1041 vs periodic cash, (3) child support (never taxable) allocated aggressively, (4) unallocated family support if state allows, (5) shift retirement assets via QDRO/§408(d)(6) — larger tax-free amount to alimony recipient in exchange for lower ongoing cash.
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A Qualified Domestic Relations Order splits qualified plans between spouses with no 10% penalty and no tax.
Three flavors of §6015 relief remove joint liability for a spouse's understated tax, deficiency, or unpaid balance.
Grantor trust for the benefit of an ex-spouse shifts income taxation to the lower-bracket recipient post-TCJA.
A properly-drafted marital agreement locks down separate ownership of pre-marital and gift/inherited assets.
In the year of separation, MFS can beat MFJ when incomes are lopsided, deductions are personal, or spouse is untrustworthy.
§408(d)(6) IRA transfers and §223(f)(7) HSA transfers pursuant to divorce decree are tax-free — no rollover rules apply.
Divorced spouses can still both claim §121 use/ownership tests via §121(d)(3) tacking — up to $500K exclusion preserved.
Property transfers between spouses (or ex-spouses within 1 yr / incident to divorce within 6 yrs) are tax-free.