By JOHN F. MAXWELL, Esq.
DELMAR — A home is more than a place to live. It is also one of the largest investments most people will ever make. Unfortunately, not every real estate transaction goes as planned. Taking time to plan now can avoid grief later.
Whether you are the buyer or the seller of a home, it is important that you understand the purchase contract, the bank documents, the title documents, the deed and the mortgage. At our firm, we take pains to review the process as thoroughly as possible.
Each step is important, from understanding the contract and the rights and obligations of each party, what a home inspection is and why it matters, what deadlines are involved and which ones are significant, and in the case of two-family homes and rental income property the rights and obligations of existing and future tenants. If you are building a home, you will want to understand what a builders’ warranty does and does not cover. Finally, we want to assist purchasers in the mortgage application process.
It is our goal to stay in touch with both buyers and sellers throughout the process, to answer your questions, and to return your calls and emails quickly and thoroughly. Our clients can attest that we make every effort to alleviate their concerns at every stage of the process.
By PAUL W. VAN RYN, Esq.
DELMAR — Tax issues are of great importance when negotiating a separation or divorce for your client. Certainly any separation or divorce involving children means a multitude of tax issues.
First, there is the mundane question of which parent can claim the child as a tax deduction. Then, there is the childcare credit. Further, payments made as child support are clearly non-deductible to the payor and are not includable in the recipient’s income.
On the other hand, alimony or maintenance is currently deductible to the person paying it and taxable to the person receiving it. Under the new tax law, 2018 is the last year this will be true. The current interpretation is that the payor will no longer be able to deduct the payment of alimony or maintenance for separation agreements executed, and divorce decrees issued after Dec. 31, 2018.
Non-deductible alimony payments will subsequently increase the cost of making those payments. Assuming a combined marginal tax rate of 39.5 percent (25 percent Federal, 6.85 percent state and 7.65 percent Social Security and Medicare), or typical rate for a person earning $100,000 a year, the payor spouse would need to earn $1,652.89 in order to pay $1,000 in child support. After 2018, the same will be true of alimony or maintenance.
When dividing marital property, careful attention also needs to be paid to capital gains, tax basis and other tax issues.