Taxes and Inchoate Expenses

Courts are obligated to consider the tax ramifications of the distribution and transfers of assets, though it is the responsibility of parties/counsel to present these to the court. See Lesko v. Lesko, 184 Mich App 395, 402 (1990); Everett v. Everett, 195 Mich App 50, 54 (1992). See also the annotation at 9ALR 5th 568 (1993) Presumably, the same rule would apply as to other costs surrounding the distribution of the marital estate, such as brokerís fees on the future expense of stock liquidation.

One major exception to the foregoing, in my judgment, would be brokerís fees on a house or real property that is unlikely to be sold in the short run. See the listing in this index under "marital home". In this respect see Hanaway v. Hanaway, 208 Mich App 278, 301 (1995) distinguishing Everett when "no sale or other taxable event was planned or contemplated."

In Kemerer v. Kemerer, No. 222797 (Unpublished, December 21, 2001) the court holds that "Adjustments should be made for taxes in valuing property only where the tax liability is reasonably foreseeable, not highly speculative or conjectural, or when the tax liability is likely to arise in the near future."

See, however, Johnson v. Johnson, ---Mich App--- (Unpublished 11/18/04) where Joe Cunningham testified that the value of a business should be reduced by taxes upon sale. The COA said there was no evidence of sale, so no taxes were appropriately in the stew. Joe thinks this is pretty wacky and has written in the FLJ to this end in 2006 on (at least) two occasions. At the least, I see Joe's point of view.