Family Issues
The most frequently asked tax questions related to Family Issues
Is there a deadline in which a person can select the Innocent Spouse Relief election ?
Asked Thursday, September 21, 2000 by an anonymous userCPA Answer:
Yes. The taxpayer has until two years from the due date that the IRS first attempts to collect tax from you on the joint return to make the innocent spouse election. The election is filed on Form 8857.
Is there any way I can prevent my IRA from being shared with my spouse during a divorce?
Asked Sunday, September 17, 2000 by an anonymous userCPA Answer:
No. Whatever monies earned in that IRA during your marriage is considered a marital asset. As a result, this means that if you get divorced your spouse will be entitled to 50% of the money. You would also be entitled to 50% of your spouse's retirement money. This is true even if you did not name your spouse as the beneficiary of the IRA.
Do I always get to deduct the total gross amount of my itemized deductions ?
Asked Monday, September 11, 2000 by an anonymous userCPA Answer:
For 2011, there is no phase-out of itemized deductions regardless of your adjusted gross income. The same no phase-out rule will apply to 2012.
Divorce agreement doesn't specify who takes the dependency deduction for child
Asked Monday, September 04, 2000 by an anonymous userCPA Answer:
The parent having custody of the child is always entitled to the dependency deduction, unless the custodial parent waives his or her right.
I receive both alimony and child support for my children . Is either payment taxable ?
Asked Monday, September 04, 2000 by an anonymous userCPA Answer:
Alimony or separate maintenance payments must be included on your tax return as income in the year received. Child support is not taxable and not reportable. Likewise your ex-spouse can deduct the alimony but cannot deduct the child support.
What is the cost or basis of assets transferred from one spouse to another at a divorce settlement ?
Asked Monday, September 04, 2000 by an anonymous userCPA Answer:
The cost basis of assets transferred from one former spouse to another is the donor's basis. The recipient spouse may have to pay tax if there is appreciation of the asset at the time it is sold.
If I live with my girlfriend and support her, can I claim her as a dependent ?
Asked Monday, September 04, 2000 by an anonymous userCPA Answer:
Not necessarily. Cohabitation may be technically illegal in your state. The IRS will follow the state law in determining whether your relationship is in violation of any state domestic law. When no local law is violated, a dependency exemption is allowed.
Tax consequence of receiving stock from spouse as part of a divorce settlement
Asked Monday, September 04, 2000 by an anonymous userCPA Answer:
Transfers of any property between spouses that are incident to a divorce are treated as tax-free exchanges, and as a result, it is not reportable or taxable.
What is Innocent Spouse relief ?
Asked Sunday, September 03, 2000 by an anonymous userCPA Answer:
Innocent spouse relief refers to rules that allow a spouse to seek relief from the IRS. Under this law, the spouse can escape from personal liability for tax returns filed jointly during the marriage if he or she had no knowledge that the tax was not paid or partially paid.