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Definition Capital Gains Tax - a tax lower than ordinary income on the sale of capital assets.
Application in Divorce In divorce actions involving large marital estates, the capital gains taxes that may have to be paid require careful consideration. The services of a tax accountant are well worth the money.

Many spouses agree to a settlement that seems fair, but after the taxes are paid on his or her portion of the settlement he or she only begins to realize that they got the short end of the stick. Examining the tax repercussions of a divorce settlement is a must. This is one of the first elements of a proposed settlement an accountant or lawyer should examine, because most opposing sides who are trying to offer an unfair settlement will include assets with a much higher perceived value due to a lack of consideration for taxes.

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The House-What Happens in Divorce-Don’t Ignore the Tax Consequences
On August 5, 1997, President Clinton signed the Taxpayer Relief Act of 1997 into law. The scope of the legislation encompasses measures ranging from a child care tax credit for low and moderate-income families to new tobacco taxes. The Act includes changes to the way capital gains are treated. For investments, tax rates were reduced from 15%-28% to 8%-20%, depending on income.
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