divorce

[Judshutts]

I separated from my wife in November 2021.  How do I file taxes this year... Usually as Joint filing together.  should we be filing as married but filing separately or jointly?

She bought and sold property with her inheritance.  We paid expenses to visit the property from our joint account.  how do we claim the expenses.  I believe they should be repaid to our joint account from her profits on the sale?

[DMarkM1]

Assuming you were still married on 31 Dec, filing jointly would be the easiest.  However, you certainly can file separately.  How you do that depends on the state you are filing in.

If your state is a community property state (Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico, and Wisconsin) then you would include on your return 1/2 of all joint property (including wages/pay) plus anything that is strictly yours. Your spouse would do the same on her return.  

If your state is not community property then you each would only put on your respective returns that which belongs to you.  

There are no deductions for visiting a property you own.  

For the the profits (gain) on the inherited property sale, remember the gain is only the amount of the sales price that exceeds the value of the property on the date of death.  So if the property sold shortly after the inheritance there would be little if any gain to report for tax purposes.

[Judshutts]

We live in CA.

The property was purchased in May 2021with money from her inheritance.  The property was sold in October 2021 with a profit of $20k.  bought and sold with as an investment in bare land... does that make a difference with regard to expenses incurred?

[RobertB4444]

Investment property that is purchased with your own money (regardless of how you got it) and sold for a profit in the same year is considered a short term investment and is taxed at your regular income tax rate.  So the tax on that extra $20,000 may be steep.

Investment expenses are not a deduction anymore, however expenses associated with the actual purchase of the property are included as part of the basis (amount paid for the property) and expenses associated with the sale of the property will be included in 'expenses of sale.'