Divorce Support Forums: Divorcing a Business Owner

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...putting the house & cars into the business as some sort of tax shelter was not taking them out of the community, and by using the business to support the community he intermingled the business assets so that you deserve at least half of the increased value.
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So much of this depends on how the business is structured. Only if it is a "sole proprietership" would most of Gigi's comments be valid. If it is a corporation, and the corporation allowed the use of its vehicles to its CEO and his family, as a benefit of employment, then only the value of the transportation would have represented income which could have been divided as community property. The problem with this is that the transportation, itself, is a "consumeable" and the value of any phantom "income" represented by it was used up in step with the accomplishment of the transport in question. The same can be said about company authorized use of a company-owned house by an employee and his family, as an employment benefit; the hypothetical value of the lodging can be said to have been received by the man (community property) but then, as soon as received, immediately paid back to the company in return for said lodging.

This is how gifts of consumeables work, with no residual value remaining after the item is totally consumed, which can then be further divided between the beneficiaries of the gift. Of course, if we were talking about a bonus, a new car as reward for outstanding performance, etc., then this could be community property. The IRS may not see it this way however, and may expect you to report the value of the transport, lodging, etc., as income and pay tax on it, but if there is no residual "income" of this type left, because it was never physically received, how is a court going to divide it as community property?

Many principal officers in corporations own large amounts of the company's stock and, indeed, may take little or no salary, but only benefits of the kind mentioned. The idea is that they will be paid when the appreciated stock is sold. If, however, the stock has not appreciated and may even have depreciated, and in any case has not been sold, where is the income or community property?