When going through a divorce the big items are the ones that are discussed, fought over, and settled. You discuss alimony, child support, living arrangements, dividing up assets. What about your tax return? You can file joint for that last year together if you wish. If filing joint, you may not suffer any adverse effects, if filing separate, you may.

Recently, I was asked to report the cost basis and gain/loss on some previously jointly held holdings for a divorced couple. Even though one Spouse had inherited all of the assets, they were moved to a joint ownership with the non-inheriting Spouse’s social security as primary on the account. There happens to be a taxable loss from one of the holdings that will now benefit the non-inheriting Spouse.

A final tax return needs to be discussed and written into the divorce decree. You may be leaving something on the table that you wish you had not.

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