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Message
OT tax question....
Posted on 2/12/15 at 12:04 pm
Posted on 2/12/15 at 12:04 pm
Divorce in 2014. Previously owned two homes. Each of us took one. House #2 was rented for half the year, then lived in after divorce. So hence there was marital income for that half of the year from the rent. Does that get split between us two?
What about full claim of mortgage interest? Split, or each take the deduction of the house we own at the end of the year?
What about full claim of mortgage interest? Split, or each take the deduction of the house we own at the end of the year?
6
Posted on 2/12/15 at 12:05 pm to Tiger in Gatorland
Money Talk may be a better option for you to get an answer/
Posted on 2/12/15 at 12:05 pm to Tiger in Gatorland
Ask a tax professional please.
Posted on 2/12/15 at 12:05 pm to Tiger in Gatorland
Claim all deductions for yourself... split all income w/ her.
Posted on 2/12/15 at 12:07 pm to terd ferguson
quote:
Claim all deductions for yourself... split all income w/ her.
This, just make sure you file first
Posted on 2/12/15 at 12:23 pm to Tiger in Gatorland
Was it not spelled out in the divorce decree?
Posted on 2/12/15 at 12:31 pm to The Spleen
quote:
Was it not spelled out in the divorce decree?
No. I think attys usually indicate they are not responsible for tax ramifications of divorce. My research tells me that for the half year it was rented, we split income, and split expenses. The other half the year, I lived there and it's claimed as primary residence. Split mortgage interest between primary and rental deduction.
Posted on 2/12/15 at 2:05 pm to Tiger in Gatorland
Were the houses and the expenses and the debt joint? Or were you in a community prop state without a prenup?
Understand divorce atty doesn't want to give tax advice, but the decree should have spelled out how the money would flow. And if you can follow the money, you can figure out the tax implications.
Understand divorce atty doesn't want to give tax advice, but the decree should have spelled out how the money would flow. And if you can follow the money, you can figure out the tax implications.
Posted on 2/12/15 at 3:09 pm to LSUFanHouston
I'd definitely be having a professional do my taxes in the year of the divorce. Seems like this can get very complicated.
Posted on 2/12/15 at 3:40 pm to Tiger in Gatorland
Divorce really complicates preparation of tax returns. The best solution for both parties is generally achieved if there is cooperation since some of the income and deductions will be allocated between the ex-spouses, and it will be beneficial to report on the tax returns as nominee amounts. It also helps avoid items going unreported, or partially reported through lack of communication.
It is likely too late to do anything about, but the party who took House #2 will have tax issues due to the depreciation allowed, or allowable, on House #2 while it was used as a rental property. That person will have gotten 50% of the benefit of the deduction for the depreciation, but that person will bear 100% of the burden for all depreciation recapture, and the lower adjusted basis resulting from the depreciation.
Divorce lawyers seldom want tax accountants involved in negotiating property settlements, but sometimes that can be detrimental to their client's interests.
It is likely too late to do anything about, but the party who took House #2 will have tax issues due to the depreciation allowed, or allowable, on House #2 while it was used as a rental property. That person will have gotten 50% of the benefit of the deduction for the depreciation, but that person will bear 100% of the burden for all depreciation recapture, and the lower adjusted basis resulting from the depreciation.
Divorce lawyers seldom want tax accountants involved in negotiating property settlements, but sometimes that can be detrimental to their client's interests.
Posted on 2/12/15 at 3:50 pm to Poodlebrain
quote:
That person will have gotten 50% of the benefit of the deduction for the depreciation, but that person will bear 100% of the burden for all depreciation recapture, and the lower adjusted basis resulting from the depreciation.
I have a new client that was referred to me in December 2014. Very similar situation. Divorce finalized in March 2014. Two houses. One personal residence one rental property. Apparently the husband (who is now client) wanted to sell both houses before divorce was final, split the cash, and move on. Wife refused saying she did not want to be involved in "any transaction" with him. Husband did not push issue. Husband ended up with rental property. One month after divorce is finalized, husband sells rental property. Pretty significant gain.
Had to tell him the bad news. Attorney screwed that one up. Also told him it's unfortunate ex-wife didn't die a week before divorce was finalized, as he would have gotten step up in basis. He laughed.
Posted on 2/12/15 at 7:29 pm to LSUFanHouston
She is the one who transferred the income producing property to me which I then moved into. Vpublication 504 indicates she would claim the income, gain or loss during the time rented. I continue to live in the house; have not sold it so have not realized any gains from sale.
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