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When negotiating the distribution of marital property, tax consequences must always be taken into account. There are federal, state and local taxes to consider. Leaving any of these out of the equation, particularly when the divorcing couple is wealthy, can mean that assets from which the parties might have benefited are lost to the tax man.
A Hypothetical
Let us look at one hypothetical involving a couple residing in New York State. The married parties, Henry and Willa, own a townhouse in Manhattan (the Townhouse). They also each own a 50% membership interest in H & W, LLC (the Company), which owns a residence in Amagansett, NY. Neither property is subject to any mortgage.
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