How the new tax law affects divorce settlements and business valuations

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Abstract: Business valuation experts often help formulate settlement offers in divorce cases. This article highlights provisions of the Tax Cuts and Jobs Act (TCJA) that could affect divorce settlements, including elimination of the deduction for alimony payments, restricted deductions for state and local taxes, expanded uses of Section 529 education plans and reductions in business tax rates. A sidebar defines alimony under the tax rules that will apply through 2018.