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enter a comprehensive settlement of the cases that we are now
required to decide.
By 1988 amendment to the New Jersey equitable distribution
law, the tax consequences to each spouse of a proposed
distribution are included in the factors to be considered by the
New Jersey court. N.J. Stat. Ann. sec. 2A:34-23.1(j) (West 1987
& Supp. 1995). New Jersey courts recognized--even before this
amendment--that tax consequences, including Federal tax
consequences, should be taken into account in making an equitable
distribution. Dugan v. Dugan, 457 A.2d 1, 10 (N.J. 1983); Stern
v. Stern, 331 A.2d 257, 261 (N.J. 1975); Painter v. Painter, 320
A.2d 484, 493 (N.J. 1974). Compare Goldman v. Goldman, 646 A.2d
504, 508-509 (N.J. Super. Ct. App. Div. 1994) with Orgler v.
Orgler, 568 A.2d 67, 74 (N.J. Super. Ct. App. Div. 1989).
The fact that a New Jersey court ordering an equitable
distribution would have considered Federal tax consequences was
an important factor in the decision of the Court of Appeals for
the Third Circuit in Yonadi v. Commissioner, 21 F.3d at 1296,
that the wife was liable for the capital gains tax attributable
to the sale proceeds from the portion of the appreciated assets
of a business allocated to her under a New Jersey divorce
settlement agreement.4 The Court of Appeals held that imposition
4Alice Berger asks us to disregard Yonadi v. Commissioner,
21 F.3d 1292 (3d Cir. 1994), revg. and remanding on other grounds
T.C. Memo. 1992-602, because no appeal in the case at hand would
(continued...)
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