In divorce, Wife recoups Husband's gambling losses

Under the "no-fault" doctrine on which Pennsylvania divorce law is based, one spouse's faults such as adultery, alcoholism or even domestic violence have little impact on how the law treats the other spouse's rights to alimony or the property division (equitable distribution) of marital assets.
In other words, the law will not punish a horrible husband or disloyal wife by awarding more money to the innocent spouse.
One significant exception, however, is if one of the spouses has "dissipated" or wasted money from the marital estate. A man who, prior to any break-up or divorce litigation, splurges on vacations or diamonds for the new girlfriend will be held accountable for his free-spending ways.
A good example is a recent case from upstate Pennsylvania in which the court originally awarded a wife only half the marital estate that accumulated during the couple's 23-year marriage. The most valuable asset in the marriage was husband's business.
After the wife appealed, the court changed the distribution from 50-50 to 65-35 in favor of wife, based in part on the fact husband had consistently gambled away $20,000 to $30,000 a year. Also entering into the court's 65-35 split was its recognition that the wife's work as a homemaker had contributed to the husband's business success.

Income for child support purposes goes beyind paychecks

Child support payments are based on the incomes of both parents. A percentage of their combined incomes is supposed to be devoted toward the support of the child. The dollar amount of support depends on the total income and number of children who require support. Each parent must pay a pecentage share of the overall support, based on their respective incomes.
The law broadly interprets how "income" is defined. Generally, any money - earned or otherwise - that is within reach, possession or control of either parent is included in the calculations to determine child support obligations. In addition to weekly paychecks, this means that annual bonuses, perfomance bonuses, overtime pay, and sales commissions are all treated as regular income.
The scope of income that is considered eligible for child support extends beyond wages. For example, a parent who owns rental property will see any cash flow, as well as tax depreciation, treated as income under child support guidelines. The extra cash you stash in your IRA each week? That's income. The early retirement buy-out from your employer? That's income, too.
For example, a Berks County judge ruled that a tax-exempt cash payment, resulting from a parent's lump sum personal injury lawsuit settlement, was to be considered income for child support purposes.
The parent was ordered to amortize, or spread out, the total amount of lawsuit money over the number of years the child was eligible for support. So instead of a one-year bump in the parent's income, and a corresponding one-year increase in support, the child was able to benefit from the parent's windfall for the remaining years of the child's minority. The parent had tried to argue the child should only be eligible to receive the interest earned on the cash award.

Claiming children as tax deductions when sharing custody

 

The general rule is that whichever parent has a child most overnights per year is entitled to claim that child as a tax dependent.
However, with the trend of more parents having equal, or 50-50 shared custody after a separation or divorce, the question often arises as to which parent can claim the child on their tax return.
The best answer is for both parents to agree. This arrangement can be formalized in a custody agreement or property settlement agreement (also known as Equiitable Distribution). There can also be an informal understanding between the parents.
Obviously the tax deduction is more valuable to the parent with the higher income. Sometimes an economic deal can be made in which the other parent receives some other financial consideration in return for surrendering the right to claim the tax deduction. Another arrangement is to swap the tax deduction between the parents in alternate years.
If the parents are unable to agree, then the Internal Revenue Code rules. The law states that the parent with the "highest adjusted gross income" is entitled to the deduction. That law is IRC section 152(c)(4)(B)(ii). This rule is called the "tie-breaker rule."
The right to claim the child as a tax dependent is quite valuable, and if a parent qualifies under the current tax law can entitle them to other tax benefits such as head of household filing status, a child care and dependent care credit, a child tax credit, an earned income credit, certain itemized deductions and an education credit.