Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
jlpresba
New Member

If married and filing separately can all (total) investment income just be divided in half or does it have to be divided according to the SS # on each investment account?

My husband and I both have individual living trust investment accounts.  In addition to ourselves being trustee of our own trusts, we are also both trustees of each other's trusts.  So although we each have our own individual social security numbers associated with our own individual living trust investment accounts, we can both transact freely on both of them as trustees.  

One trust had an investment which had a large capital gains distribution in 2018.  Filing a joint return will put us into a whole other tax bracket; however, if we can simply divide all our investment returns equally in half and file separately, it will put us both in lower brackets according to your "What If" scenario. Can we handle our investment returns in this manner?  (As an aside, I'm assuming my husband would have to report his W-2 earnings only on his own separate return, correct?)

1 Best answer

Accepted Solutions
WillK
Level 9

If married and filing separately can all (total) investment income just be divided in half or does it have to be divided according to the SS # on each investment account?

No, you cannot divide the investment income equally between you both, you need to report the income and any associated investment income that is tied to the social security number. So your income and investment income that is under your social security would need to be reported on your return and your husbands on his. The IRS ties information according to your social security number, so you need to report according to that. 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

1 Reply
WillK
Level 9

If married and filing separately can all (total) investment income just be divided in half or does it have to be divided according to the SS # on each investment account?

No, you cannot divide the investment income equally between you both, you need to report the income and any associated investment income that is tied to the social security number. So your income and investment income that is under your social security would need to be reported on your return and your husbands on his. The IRS ties information according to your social security number, so you need to report according to that. 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

Dynamic AdsDynamic Ads
Privacy Settings
v