11.11 Other Important Issues

• Library: Virginia Law and Practice: A Handbook for Attorneys (Virginia CLE) (2020 Ed.)

11.11 OTHER IMPORTANT ISSUES

11.1101 Bankruptcy.

A. Domestic Support Obligations and Debts. It is important to keep in mind in any divorce case that domestic support obligations and debts that are incurred by a spouse in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record are not dischargeable in bankruptcy. ¹⁸⁰

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B. Effect on Pending Divorce Action. Timing is crucial when bankruptcy may be an issue. If a divorce action is filed before the bankruptcy, and is still pending, the state court loses jurisdiction over the property of the estate. ¹⁸¹

11.1102 Federal Taxation. The following are important federal tax considerations concerning divorce, custody, and support issues.

1.	IRS Publication 504 addresses tax issues for divorced and separated individuals;
2.	Child support is not tax deductible and is not income for the recipient; 182
3.	The parent who has custody generally gets the dependency exemption; 183 and
4.	Transfers of property incident to divorce are not taxable events. 184

11.1103 Federal Taxation Changes Made by the Tax Cuts and Jobs Act of 2017.

A. Spousal Support Deductibility. The Tax Cuts and Jobs Act of 2017 (TCJA) ¹⁸⁵ repeals the deductibility of spousal support payments for the paying spouse. ¹⁸⁶ This means that for divorce or separation agreements executed after December 31, 2018, the paying spouse cannot deduct alimony payments from his or her taxes. Further, the receiving spouse will no longer have to include the alimony payments as taxable income. This treatment of alimony payments will apply to all payments required by "divorce or separation instruments that are: (1) executed after Dec[ember] 31, 2018 or (2) modified

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after that date if the modification specifically states that the TCJA treatment of alimony payments...