If there are significant gains or losses from passive activities, strongly advise your client to consult a tax professional on special rules for these activities and the effects of an MDA on future tax returns. Deducting tax advice. Expenses for tax advice and research relating to the client's divorce and property settlement may be deductible. Refer the client to a tax professional regarding these rules. Deducting legal costs of the divorce.
Legal costs relating to the collection of alimony are deductible.
18 Costs incurred in defending an action to collect alimony or child support are not deductible. Generally, legal expenses relating to a divorce are not deductible. 19 IRA transfers. The transfer of an IRA pursuant to a divorce decree is not a taxable event if transferred correctly. Generally, there are forms available from brokerage houses or banks to complete this transfer.