Virginia Divorce ~ Tax Consideration
Virginia law includes the tax consequences to each party as a factor considered by the court in decisions about dividing owned marital property. In order for the court to consider the effects of taxes on each party, the contesting party must provide evidence of the expected tax consequences. These consequences must be fact, not speculation.
Capital Gains Tax :
Transfers of property between spouses because of divorce incur no clear gain or loss.
Alimony :
Usually alimony is deductible from the gross income of the paying spouse and included in the gross income of the receiving spouse. Several rules regulate how the payments must be made in order for these tax allowances to be made. Spouses may also choose to exclude the payments from deduction if they wish.
Child support is not deductible by the paying spouse and is not income for the receiving spouse.
A big issue for spouses filing for divorce is filing joint or separate returns. The parent with custody may file dependency exemption and the new per-child tax credit, but if the parents agree or the court decides it is possible for the non custodial parent to receive these credits. They can also be alternated between the parents year to year. The exemption for any child may not be split between spouses.
Source : Virginia State Code