Analyzing Income or Cash Flow in Spousal Divorce

In my previous blog, posted in April, I discussed who hires a forensic accountant in spousal divorce and offered broad categories of what the forensic accountant might be hired to do: analyze income or cash flow, trace separate property, uncover and quantify previously undisclosed assets, summarize money spent on extramarital affair(s), or analyze tax consequences of property division.

Today, I want to explain one of those items in more detail: analyzing income or cash flow.  In spousal divorce, cash flow available needs to be quantified as a step in determining whether support (child support and/or spousal support) is appropriate, and if so, what the proper amount is.  Income as reported on Federal tax returns frequently does not represent cash available year over year due to a number of potential factors.  Qualified retirement income, depreciation, and distributions from Subchapter S Corporations are examples of just a few items that need to be considered when moving from income on a tax return to actual cash flow available for support.

These examples reinforce a theme that has featured prominently in my previous blog posts: comprehensively understanding the facts and analyzing the appropriate data allows for effective and efficient problem solving in the complicated arena of spousal divorce.

Please contact me at bpetrie@claruspartners.com or (614) 545-9100, if you have complex financial issues that need be understood and presented simply and cleanly.  At Clarus, we bring clarity to complex financial issues so you can make solid, well-informed financial decisions.

I am not an attorney and do not purport to be giving legal advice.  If you are seeking legal advice, please consult your attorney.

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