I am a 58 year old male who is getting a legal separation from my wife of 10 years. She is 59.
As part of our legal separation agreement, I will liquadate a large part of my IRAs ($250K) and transfer them to my wife. The plan is to also give her a lot of our combined debt ($155K). She will use the funds to eradicate the debt.
My understanding is that as soon as the legal separation is granted, I can transfer the IRA funds to her without incurring a 10% penalty.
She is a nurse who earns about $75K per year. I will keep our house. I believe that she can still claim her son as a dependent since he is 23 and is supported by her (us).
I need to estimate my wife's tax
burden for 2011 since we will no longer be married before the end of the year (we will be legally separated).
It is my understanding that we can not file jointly. Can we each file as head of household?
Also since the bulk of the money is going to pay bills, is there any tax break that my wife can claim?