A parent who pays child support might want the tax benefit of the dependency exemption for the non-custodial parent, but electronic filing can botch it, if it’s not done right. IRS Form 8332 is a “must” to secure the dependency exemption for the non-custodial parent. In many cases, the parents agree, or a court decides, […]
Parents may be eligible to deduct child-related expenses or claim tax credits if the legal criteria are satisfied. When parents are separated, divorced or unmarried, the child-related tax credits, exemptions and deductions must be allocated between the parents, either by agreement, by the court, or according to the law. Chapter 5 of Frumkes & Vertz on Divorce Taxation discusses these issues in detail, including the child’s dependency exemption, child tax credit, child care expenses, and child medical expenses.
There may be no “TurboTax defense” for taxpayers when they rely on tax preparation software to lure them into claiming bad tax deductions, according to a recent decision of the U.S. Tax Court. In Bulakites v. Comm’r., T.C. Memo 2017-79, the taxpayer was an insurance consultant, serving a clientele of mostly accountants. Rather than enlisting […]
Spouses who are paying alimony must pay careful attention to the “7 Do’s” of alimony, or risk losing the alimony deduction**. One of those seven requirement is characterized as “distance,” the requirement that spouses who are divorced or legally separated must live in separate households in order to qualify payments as alimony. An opinion of the […]
Spouses need to be cautious that they are not overlooking tax assets in divorce proceedings where marital or community property will be divided. Tax assets and liabilities may be less obvious than houses, cars and furniture, but often they are just as valuable. An experienced family lawyer can identify tax assets and ensure that they are considered in […]
Parents who are separated may run into trouble if they do not synchronize their tax deductions and credits for their children when they file separate returns. When both parents claim the same tax deductions for their children, one or both of them may be audited by the IRS. There are specific rules and procedures that must be followed precisely […]
Real Estate Tax Deductions – Unmarried Cohabitants Voss v. Comm’r, __ F.3d ___ (9th Cir. 2015) Bruce Voss and Charles Sophy were co-owners of real property, for which each of them claimed home mortgage interest deductions in 2006 and 2007. Voss and Sophy were registered domestic partners in California, but unmarried for federal tax purposes. […]
Porter v. Comm’r, T.C. Memo. 2015-141 The taxpayer, a father of three children, moved to Virginia after being divorced in Florida in 2002. The children stayed in Florida with their mother, under the terms of a mediated divorce settlement. For tax purposes, the eldest and youngest children were assigned as Mother’s dependents, and the middle […]
In October 2015, the IRS issued its 2016 tax rate tables and the annual inflation adjustments for 2016 for more than 50 tax provisions (Rev. Proc. 2015-53). The updates include the tax tables for married filing jointly, married filing separately, single and head of household filing status; standard deduction; personal and dependency exemptions; AMT on kiddie tax; […]
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