Question 1

When does my filing status change after divorce?

Accepted Answer

Your filing status is determined by your marital status on December 31. If your divorce is final by year-end, you file as Single or Head of Household (if you qualify).

Question 2

Who claims the children as dependents?

Accepted Answer

Generally, the custodial parent claims the children. However, the custodial parent can release the claim using IRS Form 8332, allowing the non-custodial parent to claim the exemption.

Question 3

Are property transfers in divorce taxable?

Accepted Answer

Transfers between spouses as part of a divorce settlement are generally tax-free under IRC Section 1041. However, the receiving spouse takes on the original cost basis, which affects future capital gains.