Married Filing Seperately Questions

Last year, my wife and I filed our federal taxes jointly. This year, we may file separately (MFS). This is due to the fact that our taxes should be lower due to the way the AMT affects our tax situation. However, there are a few things that I still can't figure out, and I was wondering if anyone could enlighten me. If we get interest and dividends from jointly owned mutual funds, how do we distribute the income between our tax forms? If we have a long term capital loss caryover of about $8000 from last year, and several short and long term capital gains and losses which have us end up with a capital loss of about $14,000, how do we distribute them between the two Sched D.'s? I know we end up with a loss of $1,500 each to subtract from our taxable income for this year, but I am not sure how to distribute things between the two forms. Can we divide everything down the middle? Next year, if we file jointly, can we recombine our capital loss caryovers? Finally, if one of us is underwitheld, and we want to apply the rule about having as much witheld as was owed last year, how do we adjust for the fact that the amount owed last year was for a joint return, not a separate one?

Thanks for any advice.

-David, snipped-for-privacy@yahoo.com

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Reply to
David
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That may depend on where you live (Community property state or not).

Based on what you said, we DON'T know that each of you gets half of the loss. Losses follow ownership. You didn't say whether or not both of you were owners of the assets that generated the losses.

The IRS has published instructions on how to claim jointly-made payments on separate returns.

Reply to
D. Stussy

Right. I should have mentioned that I live in Oregon, which is not a community property state.

Prior to our marriage, we both owned some stocks and mutual funds and had capital loss caryovers. Since our marriage, we now jointly own everything, have filed jointly for several years, and had both long and short term gains and losses on various stocks and mutual funds in each year, resulting in a new capital loss carryover, of which $3000 is applied to that year's taxable income. So, other than splitting everything down the middle, I can't think of any other division that would make sense. But maybe I am missing something?

-David, snipped-for-privacy@yahoo.com

Reply to
David

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