Alaska Supreme Court: divorce splits must account for who pays the taxes

The Alaska Supreme Court has upheld nearly every piece of a long-term couple's divorce judgment — but sent one question back to the trial judge: who pays the tax bill?

The July 17 decision leaves unsettled what Jonathan Cline and Melinda Duckett each ultimately keep. Marital property sold before the divorce was final generated capital gains taxes, and the superior court ordered that debt divided the same way as the estate: 55% to Duckett, 45% to Cline.

The justices found no explanation for why the unequal tax split was fair — and because the tax allocation changes each spouse's real, after-tax share, they ordered the judge to show the work. The taxes don't have to be split equally; the split has to be justified under the factors Alaska courts use to divide marital property and debt.

Everything else stood. The court affirmed child support of $640 a month for the couple's disabled adult daughter, the decision to count a $100,000 inheritance as marital property, the 55% of the estate awarded to Duckett, and the denial of credit Cline sought for money he said he spent on the marital estate after separation. The justices also rejected Cline's claims that the trial judge was biased.

The practical point: a divorce split is a percentage on paper and a percentage after taxes in real life — and Alaska's high court says judges have to explain that part too.