I Am In The Process Of Divorcing And Have Some Tax Credits And Capital Loss Carryovers. What Happens To Those In A Florida Divorce?
It’s common to forget to address the division all of your marital property in a divorce settlement, and one of the most common issues involves taxes.
When many couples are dividing property, they think of homes, vehicles, bank accounts, and retirement accounts.
What many people forget, unless they have experienced divorce attorneys and financial professionals working with them through the process, are intangible assets.
One common example of a valuable intangible asset is a tax credit or a capital loss carryover.
A tax credit reduces the taxes you owe dollar for dollar.
For example, if you added solar panels to your home, you may have received an energy tax credit for $5,000. That credit can often be refunded or used in future years to reduce tax liability.
You may also have capital loss carryovers. If your capital losses in one year exceed your capital gains, and exceed the tax deduction allowable for a single year, the loss can be carried over to future years.
If you received either tax credits or capital loss carryovers during the marriage, those should be addressed in the divorce settlement.
They may only be valuable to one spouse, but can be used as a bargaining tool, and can be divided like marital property in the settlement.
Although getting a $15,000 tax credit in a divorce may not sound as exciting as the boat or a bank account, in many cases tax credits and deductions are worth more.