AN ACT to clarify the laws regarding equitable distribution by requiring the court to consider evidence relating to built‑in taxes and other tax consequences of the parties to a divorce action in determining equitable distribution.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 50‑20(c)(11) reads as rewritten:
"(c)	There shall be an equal division by using net value of marital property and net value of divisible property unless the court determines that an equal division is not equitable. If the court determines that an equal division is not equitable, the court shall divide the marital property and divisible property equitably. The court shall consider all of the following factors under this subsection:
…
(11)	The tax consequences to each party, including those federal and State tax consequences that would have been incurred if the marital and divisible property had been sold or liquidated on the date of valuation. The trial court may, however, in its discretion, consider whether or when such tax consequences are reasonably likely to occur in determining the equitable value deemed appropriate for this factor.
…."
SECTION 2.  This act becomes effective October 1, 2005, and applies to actions filed on or after that date.
In the General Assembly read three times and ratified this the 23rd day of August, 2005.

	s/	 Beverly E. Perdue
	 President of the Senate

	s/	 James B. Black
	 Speaker of the House of Representatives

	s/	 Michael F. Easley
	 Governor

Approved 1:36 p.m. this 7th day of September, 2005