You live in Florida, you own a business and you’re getting a divorce. Here are 4 things that you must do prior to starting the divorce process:
1. Determine the fair market value of your business. If you value the business for more than it is really worth, then your spouse will ask for an offset against the excessively valued business. For example, if the fair market value of the business is $50,000.00 but you value it at $100,000.00, then your spouse will ask for a $100,000.00 credit and will ask that you be awarded the business. If you value your business for less than its worth, your spouse will ask for the business and credit you with the undervalued business. For example, if the fair market value of the business is $50,000 and you value it at $25,000.00, then your spouse will ask that the business be awarded to him/her and award you a $25,000.00 offset.
2. Determine your business income for divorce purposes. Self employed gross income is defined as gross receipts, less necessary and reasonable expenses required to produce income. To calculate net income, deduct for taxes and health insurance (for the parent-not the child). Generally there are no other deductions to determine “income” unless there is mandatory retirement contributions (not just that you voluntarily contribute to your 401k or whatever deferred compensation account), mandatory union dues, or child support for another child that is paid by court order and that is paid regularly.
3. Make sure your business expenses are separate from your personal expenses and that those business expenses are “reasonable” and “necessary” expenses required to produce income.
4. Determine if you need to amend your tax returns prior to starting divorce proceedings.
This article is for general informational purposes only. This article is not intended as legal advice and is no substitute for the advice of an experienced Family Lawyer. The hiring of an attorney is an important decision that should not be based on advertising alone. Contact me for written information about my qualifications. Visit my website for information about me and about my qualifications. Call 561-820-0811 to discuss your particular circumstances in confidence.