Is Illinois an equitable distribution state?

Is Illinois an equitable distribution state?

Illinois courts divide marital assets and debts according to equitable distribution. Unlike other states that divide the marital estate exactly in half, Illinois instead considers a variety of factors to determine an asset division arrangement that is fair and reasonable for both spouses.

What does equitable distribution mean in a divorce?

Equitable distribution is a legal theory whereby marital property is distributed equitably in a divorce proceeding. Property assets are classified as either separate property or marital property. Most US states follow the equitable distribution theory.

Is home equity from a divorce taxable?

In general, transfers of property between divorcing spouses are nontaxable. But there are circumstances where the capital gains tax—a tax on profits from sales of property where the gains exceed a certain amount—does apply to transfers that are made as part of your divorce.

Is divorce settlement money considered income?

Maintenance payments made by a spouse or that are attributable to a payment made by a spouse is exempt income of the receiving spouse. If a spouse receives income from an existing trust as maintenance payments instead of directly from the other spouse, tax will be payable on that income.

Is divorce property settlement tax deductible?

No matter what your settlement agreement/divorce decree calls it, you can deduct payments to your ex under four circumstances. Property transfers incident to divorce are not taxable income to the recipient and, therefore, are not tax deductible to the payor.

Do I have to pay taxes on lump sum alimony?

Alimony is taxable income according to the IRS as the recipient will receive additional money for the year. A lump sum is usually under these same rules, but the payee may want to separate the total amount to only pay on the income of part of the complete amount in separate years.