Loss Carry Forward My wife and I divorced last year and I need to know how to divide the loss carry forward when I file our returns.

[jfrancko16]

Loss Carry Forward
My wife and I divorced last year and I need to know how to divide the loss carry forward when I file our returns.
Assume I have a short-term loss of $20,000 and she had a short-term loss of $10,000 for a total loss of $30,000. The loss carryforward on our joint return last year was $10,000. Do I claim two thirds of that lost and she claims one third?

[MaryK1]

Yes, if you and your spouse once filed a joint return and are now filing separate returns, any capital loss carryover from the joint return can be deducted only on the return of the spouse who actually had the loss so you will want to divide the loss.

See https://www.irs.gov/publications/p544/ch04.html#en_US_2015_publink100072653

[KrisD]

Yes, according to Treasury Regulation 1.1212-1(c) each spouse may use his and/or her share of the remaining loss carry-over. In your example, your math is correct as long as the investments were held as separate accounts, not in a joint brokerage account, and as long as it was not mandated to be handled any differently in your divorce decree.

[Awesener]

How about in community property states like New York?

[MarilynG1]

@Awesener In a community property state, you would split the Capital Loss 50/50, if both names were on the account.

Click this link for more info Filing Separately in a Community Property State.