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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15294
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I am recently divorced, waiting for the papers any day now.

Resolved Question:

I am recently divorced, waiting for the papers any day now. My ex and I are filing married but separate for last year. I have a primary residence in VA and rental property on Bainbridge Island, WA. My husbands name is XXXXX XXXXX loans. I received both houses in the settlement. I am letting my husband take the tax write off for the primary residence because he is paying me alimony, and for last year it didn't count because the divorce was not final, so i am not paying taxes on the alimony. I was also in school and show no income. My question is, with respect to rental property, my husband put it on his taxes for last year, it's an income property but the expenses wash out the income, there was a negative each month plus expenses...Should I let him put it on his taxes for last year to simplify my taxes for last year, or should I just put it down because it will be a wash anyway. Does it help me for the future to show that I have that property on my taxes? Is there an advantage one way or another? This year will be a different story. I will filing on my own and have both properties, although unless I can refi with a no doc loan, I would probably give the write off to my ex-again until I am making enough money which I am probably at least a year or two away from..
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

MyVirtualCPA :

Hello, and welcome to JustAnswer.com While you are married, so long as one of you claims the property you will be fine

MyVirtualCPA :

However, if you get the property in the settlement then you should claim the income on your tax return once divorced You would not "give" the writeoff to your ex husband...it is your property therefore your income.

Customer:

If I was legally separated by Dec., do I claim head of household if he takes the write off?

Customer:

Or do I have to wait until the divorce is final?

MyVirtualCPA :

If you have been legally separated under a legal document then you are considered unmarried

Customer:

Oh, so he can't take the write of?

MyVirtualCPA :

You could file head of household if you pay more than 1/2 the support of a qualified dependent

Customer:

I pay all the support of my son who is 9.

Customer:

But do I have to show the alimony from Dec on? How does that work?

Customer:

Or for the whole year?

MyVirtualCPA :

To claim head of household you must meet the following criteria:

MyVirtualCPA :

  • You are unmarried or considered unmarried on the last day of the year.

  • You paid more than half the cost of keeping up a home for the year.

  • One or more qualifying persons lived with you in the home for more than half the year.

MyVirtualCPA :

Okay...if you are considered unmarried at the last day of the year, you are unmarried for the entire year. You would claim your alimony for the entire year

Customer:

Wow...that is a game changer...

MyVirtualCPA :

were you legally separated by state law?

Customer:

Yes.

Customer:

By Nov or Dec.

MyVirtualCPA :

Okay, yes - you are considered unmarried. I'm sorry if this is not optimal

MyVirtualCPA :

However, you can apply your rental losses against your alimony income to lower your tax liability

Customer:

And expenses on the rental property? Plus the write off for this property?

Customer:

My primary residence?

MyVirtualCPA :

Yes, your rental losses

MyVirtualCPA :

You would itemize and take the deduction for home mortgage interest and real estate taxes

Customer:

Oh boy.

Customer:

Thank you.

MyVirtualCPA :

You're welcome. I'm sorry if this is not good news for you

Customer:

Well, if I get the write of for the house then it should be ok, yes?

MyVirtualCPA :

I would think so, but I don't know how much income you have and what your writeoffs are

MyVirtualCPA :

but your tax will be much lower

Customer:

I ddidn't think I was going to be writing off anything. I only have the alimony for my income.

MyVirtualCPA :

Alimony is taxed just as any other income

Customer:

Yes, I know...Where I can see what my write off's can be?

MyVirtualCPA :

it is whatever your rental losses are, plus your mortgage interest and real estate tax

Customer:

So if I am not working (I was a student all year) then that's all I have to worry about?

MyVirtualCPA :

Yes, your rental activity and your alimony

Customer:

What about medical, dental etc?

MyVirtualCPA :

You can write that off to the extent that it exceeds 7.5% of your income

Customer:

Childacre?

Customer:

Education?

MyVirtualCPA :

You can take the childcare tax credit as well,

MyVirtualCPA :

and the American opportunity credit if you are in your first 4 years of school

Customer:

Is that 7.5% after my property write offs?

MyVirtualCPA :

The lifetime learning credit if you are in grad school or have already gone to school for 4 years

Customer:

Finishing undergrad...

MyVirtualCPA :

Yes, it would be after that but before your itemized deductions

Customer:

Does gardening expenses count? or house maintenance

MyVirtualCPA :

For your primary residence, no

MyVirtualCPA :

for your rentals you could write that off

Customer:

OK. Well, I certainly thank you for all of your help..This is why I am divorced:)

MyVirtualCPA :

I am here to help any time you need tax assistance

Customer:

You really have been of tremendous help to me.

MyVirtualCPA :

You can ask for me directly

MyVirtualCPA :

Once you are finished with our conversation, please rate my response "excellent" so that I may receive credit for assisting you

Customer:

OK. I will keep your info. I am sure you will hear from me again....I will contact you regarding my fathers issues. He just lost his wife and I am handling all his affairs. I lost two people in my family this year ( already lost a daughter). I have serious Trust and Probate questions I will need to deal with as well.

MyVirtualCPA :

The trust and probate questions would need to go to an attorney

MyVirtualCPA :

But, we have those here...we have a lot of excellent attorneys

Customer:

I will. Thank you so much. Do you have experience with financial planning?

MyVirtualCPA :

A little...you can post a question for me in the finance section if you need to

Customer:

OK. Thank you very much. Have a great day!

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15294
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and other Tax Specialists are ready to help you

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