DIY Divorce in Florida

Florida Divorce & Taxes - Sale of Marital Home

Florida divorce can cause all sorts of tax issues. Often your major asset is the marital home. That's our tax subject today.

Federal law allows up to a $250,000 ($500,000 in the case of a married couple filing a joint return) exclusion of gain realized on the sale or exchange of a principal residence if you have owned and occupied a principal residence for at least two of the five years prior to sale. If you and your spouse file a joint return for the year of the sale, you can exclude the gain if either spouse meets the ownership tests.

You are considered to have used the property as your main home during any period when you owned it, and your spouse or former spouse was allowed to use it under a decree of divorce or separation.

The following is excerpted from IRS Publication 523:

Transfer to spouse.   If you transfer your home to your spouse, or to your former spouse incident to your divorce, you generally have no gain or loss (unless the Exception, discussed next, applies). This is true even if you receive cash or other consideration for the home. Therefore, the rules explained in this publication do not apply.

If you owned your home jointly with your spouse and transfer your interest in the home to your spouse, or to your former spouse incident to your divorce, the same rule applies. You have no gain or loss.

Exception.   These transfer rules do not apply if your spouse or former spouse is a nonresident alien. In that case, you generally will have a gain or loss.

Florida Divorce & Taxes - Alimony vs. Child Support

We continue the divorce and taxes theme here at DIY Divorce in Florida with the two top alimony rules.

• Alimony is taxable as income to the recipient but child support is not.
• Alimony is deductible for the paying spouse but child support is not.

If you received alimony this year, you will have to pay taxes on it. If you calculated a specific amount for alimony, you may have had to "gross up" the amount to cover taxes.

Because of this tax issue, you may want to consider alternate spousal support ideas that may be more tax beneficial. For example, you may want the family home as your settlement instead of a series of monthly payments. You won't pay income tax on the home like you would if you received monthly alimony payments. Plus, your mortgage interest will be deductible and you could build equity once the market stabilizes.

Florida Divorce & Taxes - Head of Household

Divorce can make filing taxes confusing. We will review some common tax and divorce issues between now and the New Year. Remember that the general rule is that your tax filing status is determined by your situation on December 31st.

 Today we start with HEAD OF HOUSEHOLD status.

You can claim Head of Household status if you are unmarried (single, legally separated or divorced) and provide a home and at least 50% of the care of at least one dependent. Note that Florida does not have 'legal separation.'

Even if you were not divorced or legally separated at the end of the tax year, you can claim Head of Household if all of the following apply:

• you lived apart from your spouse for the last six months of the tax year, AND
• you file a separate tax return from your spouse, AND
• you paid over half the cost of keeping up your home for the tax year, AND
• your home was the main home of your child, stepchild, or foster child for more than half of the tax year, AND
• you can or could claim (under the rules for children of divorced or separated parents) your child as your dependent.

Because this status requires that you file a separate tax return, this is one situation when you want to be sure you take advantage of the best way to file your taxes.

Divorced Parents - The 12 Tips of Christmas

Here are 12 tips to help you through the Christmas season whether you are separated or already divorced:  

1. Don't Make Your Kids Choose.

This one is absolutely essential. It can be tempting to ask the kids where they want to be, but resist at all costs.  It’s been well documented you should not bad mouth the other parent, but it might be less obvious that you should never make your kids decide who they want to be with for the holiday. It is the same as asking them which family they like the best. That's one of the reasons for having a parenting schedule - everyone knows who is where when.

2. It's Tempting, But Do Not Split the Holiday.

You’ll be tempted to “split the holiday”  if you live close by each other. Maybe Christmas Eve with Mom until after Christmas breakfast and then over to Dad’s house for the rest of the day. Seems like everyone benefits, right? Wrong. You kids will be taken away from their new toys and everyone will spend alot of time getting to places. Make it easier on your kids and accept that you won’t see them every year.

3.  Skip the Relative Visit Loop.

While it's important for your kids to stay connected to extended family, if you only have a few days with them, it is no fun to always be driving somewhere else. Same principle as number 2 - a good intention that leads to a frustrating holiday. You’re together with your children. Go where you want to be, settle in and stay there. Let the relatives come to your house.

5. Coordinate Gifts.

Make sure to coordinate gift giving with your ex. Your kids will have the same Santa list for both of you. If you don’t want them to get two Elmo Lives and no WALL-E Robot, you'll need to coordinate. This one is easy to do by email. Along the same line, don't try to compete by giving expensive gifts - it will backfire a million times.

6. Skip the Guilt.

This one can be related to 5. Don’t take away from your time together by feeling guilty that you’ve “brought this on” your kids. If you make your time together special, they won’t notice, and you shouldn’t either. Also, don’t make your kids feel guilty for having fun at their “other Christmas.” A pressure-free, guilt-free holiday is the best Christmas gift to give your kids.

7. Take Pictures!

They’ll remember what’s in the pictures. This might sound trivial, but take alot of pictures when you are with your kids. You could even make them an album of the holiday. You’ll never be sure if it’s for them or you, but do it anyway.

8. Build a Seasonal Tradition.

Remember that Christmas is a season, not just a day. The more pressure you put on celebrating on an actual day, the more likely you are to be stressed out. Pick something special for the weekends you have them in December, and do it every year so that it becomes "your" holiday tradition to share with the kids. It could be anything from decorating the tree, caroling, making empanadas, putting up lights to watching Rudolph. This lets you focus on a season of family and fun.

9. One-on-One Kid Time.

If you have more than one child, try to make time for each one of them individually at the holidays. Watch a special movie together with one, take a walk with the other, run to the store to get egg nog with the third. They’ll appreciate their special alone time  and so will you.

10. Have Fun Yourself.

Do what you need to and have some fun yourself. This can be a difficult one too. If you have the kids, stop trying to make everything perfect and kick back and enjoy. If this is not your year to see them, make some alternate plans and go enjoy yourself.

11. Play Santa

Make sure that your children have a card and a gift for the other parent. Even if the other parent has never taken the kids to get you a gift, be the bigger person. Go to the dollar store, get on the computer and design a card together. Just do it.

12. Get into the Spirit of the Season.

This is a time for giving, forgiving and new starts. Turn Scrooge's emotional lessons about holidays past, present and future into New Year's resolutions about letting go of anger and treasuring all you have—despite all you have lost.

Florida Divorce & Special Needs Children - It's Autism Month

Parents of children with autism divorce at a reported rate of 80%, although no actual research can be found to document this rate. No doubt there is tremendous marital stress in autism families.

Some couples are drawn closer together but for others in relationships that are fragile or unstable, a diagnnosis can be “the last straw.” As Josh Greenfeld wrote about his child with autism, “There is a strain on any marriage whenever a baby is sick...and we always have a sick baby.”

The requirements of children with autism and other complex medical problems and special needs are complex and elusive. Parents of children with Attention Deficit Disorder (ADD), Attention Deficit Hyperactive Disorder (ADHD), Learning Disabilities (SLD), Autism, as well as sensory, muscular and developmentally challenged children face the same marital strain that other parents do, but they also have the stressors of caring for special needs children.

Finances come into play too. One of the chief causes of divorce is financial problems. A family with autism can be under financial stress from paying for evaluations and treatments (sometimes on credit which can make it worse in the long run), job losses, inability to be employed due to child duties, etc.

It may even be necessary to divorce to get state-supported services for the child that are otherwise unaffordable. (In Florida the state ended the "medically needy" Medicaid program effective July 2009.)

When "special needs" parents decide to terminate their marriage, the issues of time sharing, decision-making, custody and support take on whole new dimensions. The legal concepts used for dealing with those issues don't fit the "special needs" of the autism family.

Legal professionals are largely ignorant of the unique and sensitive care required to competently address "special needs " children when formulating parenting plans.