Question: When my husband and I divorced five years ago, our family assets totaled $500,000 and we agreed on a 50-50 division – or so I thought. I got the house and furniture ($150,000) minus the mortgage ($50,000). My husband kept his 401(k) and the bank accounts ($250,000). Because I had not worked outside the home for years and needed income, my lawyer suggested that I take the remaining $150,000 in stocks, real estate partnerships, and trusts that I was told would pay ten percent per year ($15,000) so I could have an ongoing income stream. My husband paid me alimony of $750 per month for four years.

As it turns out, I have not been able to get a job and have been forced to sell some of my assets. I didn't want to sell the house, but found the partnerships and trusts very difficult to unload. Finally, I sold two of them for half of what they were worth. Now that I have sold them, I found out that I have to pay income taxes because my husband and I had taken deductions in prior years. I am going downhill fast. Why did I ever get in this mess and how do I get out?

Anaswer: It is not unusual for a person with little business experience to get into trouble like this - especially at the time of divorce when a lot of things happen so quickly. In the past, many folks like you and your husband purchased real estate partnerships to get income tax deductions and cash flow. But there are several basic problems with these partnerships that get worse at divorce: (1) The value is not readily ascertainable. You may have paid $25,000 for a partnership interest, but no one really knows what it's worth today - until a purchaser ponies up the cash; (2) Generally, there is not a ready market for the sale of partnership and trust interests; and (3) Each tax deduction taken in prior years reduces the cost basis of partnership interest, meaning income taxes could be due at the time of sale.

If, for example, you and your husband paid $25,000 for a partnership interest and took $15,000 in tax deductions during your marriage, the remaining basis in the partnership would be $10,000. When the partnership interests were transferred to you at divorce, you took them at what is called a "carry-over basis" - i.e., the same basis the partnership would have had if you and your husband had stayed married.

If you sold your partnership interest for more than the remaining tax basis, you must pay the income taxes on that overage just as if you had earned it. This is called "recapture." We suspect that either no one talked about these tax issues during the divorce negotiations, or else you did not understand what you were being told.

If your lawyer didn't understand all the ramifications, he or she should have called in an expert to value these partnerships and tell you about the potential income tax repercussions. While not much consolation now, it sounds as though you should contact your lawyer and ask him or her why this wasn’t explained to you.

Your other problem of not being able to find a job illustrates why we tell our female readers to always keep a hand in your career, even if you work only part-time outside the home for years.