|
 Dear
Tax Talk:
I am getting divorced. My wife had a significant stock
market capital loss incurred while we were married. She does not have any taxable
income. I filed as unmarried head of household. Can I claim the capital loss and
future carryover? Or do I have to share it?
-- LB
 Dear
LB,
Your love is lost, and so are her losses.
When you go from filing a joint
return to separate returns, you have to allocate
a capital loss carryover based on the individual
losses of each spouse. Losses from a joint account
would be divided equally between the spouses.
The following example illustrates how to calculate
a carryover when going from a joint return to
separate returns.
H and W, husband and wife, make
separate returns for 2006 following a joint return
for 2005. The capital gains and losses incurred
by H and W in 2005, including those carried over
by them to 2005, were as follows.
 |
| Capital gains and losses | |
|
| | Husband | Wife |
Long-term capital
gains |
| Long-term capital losses |
| Short-term capital gains |
| Short-term capital losses |
|
In 2005 H and W had a net capital
loss of $14,000 on their joint return. Of this
amount, $4,000 was a long-term capital loss carryover
and $10,000 was a short-term capital loss carryover.
H's net long-term capital loss was $7,000 for
2005. This amount was offset on the joint return
by W's net long-term capital gain of $3,000.
Thus, H may carry
over to his separate return for 2006, a long-term capital loss carryover of $4,000.
H and W may carry over to their separate returns for 2006, as short-term capital
loss carryovers, the amounts of their respective net short-term losses from 2005,
$9,000 for H and $1,000 for W. In total they are both carrying
over $14,000 in losses, made up of short- and long-term losses. | 
