Question: My wife and I are divorcing and, as a part of our settlement, I am required to buy her 20 percent stock ownership in a company I started while we were married. It appeared to me that rather than spend my after-tax money, it would be a good idea to let the corporation pay her; but my CPA tells me that this could cause me to be taxed for dividends even though I won't be receiving any money. Why is this?

Answer: Generally speaking, when stock is redeemed as a part of a divorce settlement or decree, the wording of the documents and the intent of the transaction are very important. Whether you will be deemed to have received a dividend -- and therefore incur income tax -- depends on who had the obligation to purchase the stock. Again generally speaking, if it is your obligation to purchase your wife's stock under a court order or agreement, but the corporation pays the money to satisfy your obligation, then you will be deemed to have received a taxable dividend because the corporation will be fulfilling your financial responsibility. If, on the other hand, you have no personal obligation to buy your wife’s stock, the corporation's redemption should not result in a dividend. However, because of the complexity of this area of the law and the potential for unexpected tax liabilities and other problems, we suggest that you rely on your lawyer and CPA -- and not on ‘appearances’.

Question: Throughout our married life, my husband has kept all financial matters from me. He pays all of our debts from his office and keeps the checkbooks locked away. I have an account into which he deposits varying amounts each week. I have access to a credit card with a $1000 limit. I have never seen a tax return except for the signature page at 8A.M. on the filing date. The only time he even approaches me about a financial matter is to ask me to sign a note or credit application. When I found out that he has been cheating on me, I saw a lawyer who told me I needed to get the financial records. I can't go to our CPA to get the tax records because he will surely tell my husband, and I don’t have a key to his office. How can I get the records together without tipping him off?

Answer: You can begin by completing an IRS Form 4506 and mailing it to the Internal Revenue Service with the required check for each tax year you order. By completing line 5 of this form, you can even have your tax returns mailed to the address of a third person -- say, your lawyer. If you are a shareholder in your husband's corporation or a partner in his business, you can also order these returns.

By calling a credit reporting bureau, such as Equifax, or going online, you can order your credit report with your credit card. In this way, if you are jointly responsible for obligations, you can find out.

These are just two of the ways in which you can begin to prepare your case. To get a link to IRS Form 4506, go to www.flyingsolo.com and click on “useful links”.