Discussion:Divorced, dazed, and confused

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Discussion Forum Index --> Tax Questions --> Divorced, dazed, and confused

MsTwizz (talk|edits) said:

1 April 2006
Hello Everybody,

I have a client who was still considered married as of 12/31/05, but is divorced now. She said that her divorced papers stated that she and her ex were to file "married separately." With the info I have now, she owes tax on fed and state. Note: I still do not have her last year's return and her divorce papers. She is getting those to me tomorrow. My question to all of you who are very experienced is, if they itemized last year(2004) (I know they owned a home last year), can the home interest and real estate taxes for 2005 be split between the two of them? She mentioned that her ex husband already did his taxes and itemized and used the interest on the home..etc for Sch A. Isn't it if he itemizes her standard deduction is 0???!!!! That doesn't seem fair?

Has anybody come across this problem before?

Taxref (talk|edits) said:

2 April 2006
Assuming the client does not live in a community property state, itemized deductions are to be claimed by whichever spouse actually paid them. If your client paid part of those costs, she should claim them on her return. The fact the the ex may have improperly claimed them should not prevent her from doing so. Of course, verification could be a problem. You are correct that when filing MFS both must either itemize or take the standard deduction.

Inagpurwala (talk|edits) said:

2 April 2006
Take the deductions based on what she actually paid (Std v/s itemized ofcourse). If ex filed incorrectly, then that is that person problem. It will be good idea to let ex knows about it.

Warren (talk|edits) said:

2 April 2006
I agree with the previous responses. However, if the client resides in a community property state then it gets more complicated. All community income including wages must be split and all expenses paid from community assets must be split.

Taxea (talk|edits) said:

3 April 2006
The rule says if the ex itemized she must itemize. I agree that she should take the deductions she paid regardless of what he did.

However, is the home in both names? I would use the statement form to explain: Total "deduction" allowable Adj for taxpayer's portion

on each of the deductible expenses related to the house

MsTwizz (talk|edits) said:

3 April 2006
I just got her last year's tax form. the mortgage interest statement from last year lists both names as Payer/borrower. They filed married separate last year and she itemized using the mortgage interest. Why would a married couple do that? I am wondering why they didn't file joint and get the full $9,700? But then, I don't have his tax form, so I don't have all of the info from last year.

I am in Ohio, so not a community property state.

Mmm, I just gave her a call and she said they didn't receive a mortgage interest statement for 2005. Apparently, their house went through a foreclosure. So.... I guess she has to take the standard deduction. Bummer!

Warren (talk|edits) said:

3 April 2006
There are several reasons that a married couple would file MFS. In the case of you client, it sounds like they didn't trust each other and didn't want to be jointly and severly liable for the tax. I have had several clients file MFS over the years. Saing taxes is not their reason.

MsTwizz (talk|edits) said:

3 April 2006
Interesting. You can't tell I'm a newbie, can you? :o) I've been an accountant for many, many years but this is the first year I've done public tax work.

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