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Commercial rental and nasty divorce

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    Commercial rental and nasty divorce

    Clients jointly own commercial rental and are working hard for a 2009 divorce. A joint return is not possible for 2008. Prior passive loss carried to 2008 is about 30K. I expect a 2008 rental loss of about 6k. Wife's income is high, his is low.

    One divorce lawyer has suggested that she gets the 2 kids and he should take the rental loss. The other lawyer suggested that I get contacted to see if I will sign for it.

    It doesn't sound good to me. I think she gets the kids since she has both the time and the financial tests met.

    I think they have to split the property income & expenses.

    I think the prior losses are split 50/50 and that he will get a 2008 benefit but hers will keep going till the sale in 2009 or 2010.

    Am I missing anything? Thanks.

    #2
    If either H or W gets the rental property in the divorce, the current year's income or loss plus prior years' accumulated losses go with the property ... to the spouse who ends up with it.

    If the rental property continues to be owned by both H and W, the losses are "owned" 50/50 by each.
    Roland Slugg
    "I do what I can."

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