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What can we learn from serial celebrity break-ups, billionaire bust-ups, misbehaving spouses, pants-on challenged politicos and the ever-shifting landscape of divorce law? Question is, "What CAN'T we learn"? With latte in hand and clicky finger at the ready, dive in for the best in divorce news, views, gossip, and buzz – assembled below for your reading pleasure.

Think of Uncle Sam

Posted by Felicity Buchanan on Fri, 08/17/2007 - 8:54pm

Christina Rowe opted for her ex-husband’s share in their house instead of alimony after he spent a month in jail for skipping child support. Rowe figures that, over time, the move saved her about $20,000 in taxes.

Tax tips aren’t thrown around a lot during divorces, when emotional grenades are more likely to be tossed. But estranged spouses can save a lot by working together calmly on alimony, the sale of the house, income-tax filing status and timing of the divorce.

“Smart people say ‘I hate you, but I hate the Internal Revenue Service more,’ ” says Diana L. Mercer, an attorney and divorce mediator at Peace Talks Mediation Services in Playa del Ray, Calif., and co-author of the book Your Divorce Advisor.

Every divorce is different, so ignore anything that seems like blanket tax advice. It’s important to consult a good advisor, perhaps a lawyer or CPA, for the best approach.

In the case of Rowe, the trade-off between alimony and the house worked out. She would have had to pay tax on alimony because it is considered taxable income, but she didn't owe anything on the share of the house because property can be transferred tax-free in a divorce settlement. What saved taxes in her circumstances might not apply to others, however.

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When Real Estate Is the Ticket Out

Posted by Felicity Buchanan on Tue, 08/14/2007 - 6:27pm

Chances are you’ve read about people trapped in unhappy marriages because they couldn’t sell their home, or couples whose lifestyles took a nosedive when they divorced.

Well, this weekend The New York Times ran an interesting story about real estate facilitating divorce!

For a number of years, Michele Kleier, a realtor on the Upper East Side of Manhattan, had a client who called her regularly to check on the price she could list her 9-room co-op for.

When the market was at its peak, the woman planned to divorce her husband, sell the apartment and live on her share of the profits.

This client went through with her plan, and now lives in a California condo, where she raves about the weather and revels in the distance she put between herself and her ex. “The real estate market allowed her to buy her freedom,” says Kleier.

Brokers and attorneys alike agree that the red-hot New York City real estate market has opened up a world of possibilities for unhappy couples. Up until 2006, it wasn’t that unusual to see home prices rise 20 or 30 percent a year, and though appreciation has slowed down, sales and market value haven’t. The price of the average Manhattan apartment this summer was $1.3 million. And the $3 million apartment is now the $7 million apartment. Half of that is a lot.

Gary Becker, an economist at the University of Chicago, has studied survey data and concludes that any couple who see a drastic rise (or drop) in net worth is at risk of divorce.

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