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Stock calculation during a divorce

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Anonymous Asked:

Hi there, I have a question about calculation of stocks during separation. for example prior to marriage I had 100 shares of company X with a value of $1000 ($10 per share). At time of separation I have 200 shares of stock X worth $8000 ($40 per share x 200 shares). for equalization calculation do I use $7000 ($8000-$1000) as the figure or $4000 (the 100 shares that was acquired during marriage X current price of $40 per share)? Thank you.

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Andrew J. Kania, LL.B., LL.M.
6 months ago

Each Province has its own property regime. As such, we need to know the Province that you live in. As one example, in Ontario section 5 of the Family Law Act governs property division upon marriage breakdown. If your facts occurred in Ontario you would obtain a deduction (credit) for the value of the shares on the date of marriage and declare the entire value of the shares on the date of separation. However, please note that when calculating the equalization of net family property you examine all assets and debts on the dates of marriage and separation. It is incorrect to just consider the values of the same property, such as shares, on the dates of marriage and separation without also considering all of the other assets and debts. You should definitely speak with one of our lawyers as these are complicated issues, including with respect to tax considerations. 

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