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Ed Johnson
Ed Johnson, Tax Preparer
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Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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I am going thru a divorce and we have a house that is up ...

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I am going thru a divorce and we have a house that is up for sale (I am on the deed) and i was wondering the following: 1. Can I legally claim 50% house on yearly taxes (even if she is making payments and i don''t live there) until its sold? 2. I am paying $1200 in "Child Support"...can i claim daycare expenses? 3. Divorce states that i am responsible for 50% of medical expenses, can I claim those on my taxes?
Submitted: 6 years ago.
Category: Tax
Expert:  Ed Johnson replied 6 years ago.

DearCustomer

You can not deduct any part of a divorce or custody settelment that is considered child support.

You can only deduct the portions attributed to spousals support.

So it really depends on the languge of the decree.

Generally, the expenses you list would be treated in taxes as follows:

  1. 50% of the house: not deductable. The reason is, that you are part owner in the house, and when it is sold you will give it a capital gains treatment according to your share and the language in the divorced decree to inlcude any capital gains exclusions. A settlement of this nature is not a taxable event for her or you, except to the extent that there may be capital gains taxes.
  2. 1200 in child support: ; not a deduction.
  3. child care expenses: This is determined by who has physical custody and the langauge of the divorce decree, if any related to taxes. The person with whom the child lived a majority of the year gets to claim the child care expense. Even if you are able to claim the child as a deduction, only the custodial parent is allowed to claim the child care expenses.
  4. 50% of medical expenses: You can claim the medical expense to the extent that together with your own medical expenses, your total of all medical exceeds 7.5% of your adjusted gross income.
Customer: replied 6 years ago.
Reply to Ed Johnson's Post: Ed,

Thanks for the quick response. There is no language in the decree except that she is responsible to payments, insurance and property taxes. No mention of any capital gains whatsoever. Why would i pay capital gains if i will turn around and purchase another home?

the decree does state that she will be responsible for daycare expeneses....so I am done there, right?

So based on 75K i would need to compile $5625 in medical expenses to claim? Am i correct?


these are great answers Ed, if you could just answer the above we will be done....thanks!
Expert:  Ed Johnson replied 6 years ago.

DearCustomer

Thanks for your comments and feedback.

A lot of divorce decrees fail to mention the splitting of taxes at the sale of the home.

The old rules of rolling over a home to avoid capital gains no longer apply. Now you get a capital gains exclusion. So when you sell that home, I assume the settlement has you splitting the capital gain (profits) from the home.

You will be able to exclude up to 250,000 of your capital gains from taxes, depending on how long you lived there. Any amount in excess of the exclusion would be taxable at 15%.

So you would take half the gain and apply your exclusion.

The maximum exclusion is 250,000 if you lived in the home for 2 of the past 5 years while also owning it. If you lived there less, because a divorce is an exception, you would take a proportional exclusion based on the number of months you lived in and owned the home as you primary residence. Most likely unless this is a really big home, you will not actually pay any capital gains; i mention it because it is part of the rules for what is possible.

Day care expenses, sorry, you can not claim them...yes you are done there.

The 5625 is correct: but remember, medical expense includes:

  1. insurance premium for dental medical and hospitalization
  2. mileage to and from doctors,hospitals, pharmacies, and clinics
  3. lab testing
  4. x-rays
  5. doctor visits, dental visits, acupuncture, hypnotism, chiropractor, etc.

 

 

Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience: GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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Ed Johnson
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GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee