[Lemon]

I'm curious what other people have worked out with their ex-husbands/wives regarding tax deductions for the year that your divorce was finalized. I'm specifically thinking of real estate related items like mortgage interest from when you shared the home & mortgage payments. I'm going to be awarded the home in the divorce, but we haven't laid out yet anything about how deductions will be split. It will help my tax situation to get 100% of the deduction, but part of me feels like I should split the portion of the interest that was paid by us jointly 50/50 with my soon to be ex. Have other people split the deduction or is it always given 100% to one party or the other? The IRS publication on divorce isn't very helpful in this regard, so I'm curious what other people's experiences are prior to consulting with an expert.

[Direction]

my former spouse needed to file as an individual for college...couldn't file joint even though it would have brought more cash in...so I asked for 100% of the interest and taxes for the house to be on my return in exchange for paying the entire return up to the amount I agreed to pay her attorney...I also got the house...

If you have income and you will benifit from these deductions than get them...if it is better for former spouse to have them you can work out an agreement to give him 100% in exchange for paying part of something...similar to what I did...

[sunrise]

Lemon, I think pretty much anything is up for grabs as a bargaining chip when you are making your property settlement. For example, right now my husband and I are beginning discussions of our property settlement. If we are divorced before the end of the year and file separately, we would save thousands of dollars. That is a lot of money to me, as my own income is fairly low. However, my husband wants to buy a house before we file for divorce, and that will push our final divorce date into 2008. But since this is a big advantage to him, he is willing to compensate me for half of the thousands we would lose, since I agreed to hold off on filing. Most everything can be negotiated.

In my state, which is a community property state, I believe there is some formula for splitting the taxable income, tax liability, and deductions (such as mortgage interest), based on the date of separation. For example, if he makes $60,000 taxable income a year, and she makes $40,000 a year, and they separate 6 months into the tax year, then her taxable income is considered to be 1/2($30,000 + $20,000) + $20,000 = $45,000 for the year. For him, it would be 1/2($30,000 + $20,000) + $30,000 = $55,000 for the year. Other calculations are made for the tax liability. I would advise checking with a CPA who is very knowledgable about divorces.

Lemon, what is the IRS publication on divorce? Does it have a number? I would like to get that.

[(JD)]

Well possession is 9/10ths of the law. ..or .. He who has the receipts gets the deductions (or who signed the checks?) Ask for it all, then you have something to compromise with? (((hugs)))

Are you also splitting her/his 401k in half? What about the retirement benefits too (if spouse has any, assuming you were married at least 10 years.)

[sunrise]

</font><blockquote><div id="quote"><font class="small">Quote:</font>
_Sky said:
assuming you were married at least 10 years.)

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Is there a special 10 year rule?

[Lemon]

I never heard of a 10 year rule either. We don't need to split up the retirement benefits as they are about equal already. I looked up the IRS publications on divorce and it doesn't specifically address my question. Luckily I found the publication on home mortgage interest deductions and it has directions for what to do it you're splitting the deduction between 2 people. I've included the link as this might be helpful to others going through divorce.

IRS instructions for Divorced or Separated Individuals

[sunrise]

Thanks, Lemon.

I saw my lawyer today and the topic of marriage length came up. She said the length of the marriage is used to justify different distributions of assets in the courts. You are entitled to more the longer the marriage. She said there are 3 divisions:

Short term marriage: less than 5 years
Mid term marriage: 5-19 years
Long term marriage: 20 years and greater

We just hit 20 years this summer and she said this is very good for our settlement, as now I am in the "long term" category.