Schedule D carryover losses

[oceanlovin'ea]

Client's husband died in 2010. I am now doing her 2011 return. They had a substantial short term and long term carryover loss on their schedule D.

The accounts that resulted in the losses were joint accounts. She was the sole beneficiary of husband's estate.

So since the accounts were joint, does she get the whole carryover losses or can she only take half of them?

Thanks

Linda, EA

[oceanlovin'ea]

1099-C for deceased taxpayer

Please ignore this post......I have put it in as a separate question.


Client died in 2010. He had a time share financed at BOA in his name only.

Wife received a 1099-C for the balance owed on this loan. It reads:

xxxxxxx credit card with date cancelled and amount cancelled
Debt description - estate uncollected debt
borrower was personally liable for repayment of debt
deceased name's estate

It is in his social security number and the date is 12/31/11. When she called the bank about it, they basically gave her the run around and wouldn't give her any information and told her just to let it go. Not to worry about it.

Of course, he is required to file a tax return for 2011. Wife will file as a single person and not liable for anything in his name.

WHAT DO I DO WITH THIS????

Thanks'

Linda, EA

[joanmcq]

Were there estate assets (joint assets) that could have been used to pay the debt?

[oceanlovin'ea]

sorry

I got confused when I was posting last night. The question about the 1099-C is a separate question now.

What can I say....end of week, end of day, trying to finish up last few tax returns so I can go to the beach on Friday.

This post should be about the schedule D carryover losses.

Linda, EA

[New York Enrolled Agent]

Client's husband died in 2010. I am now doing her 2011 return. They had a substantial short term and long term carryover loss on their schedule D.

The accounts that resulted in the losses were joint accounts. She was the sole beneficiary of husband's estate.

So since the accounts were joint, does she get the whole carryover losses or can she only take half of them?

Maybe neither.

You must determine who provided the funds to purchase the securities. If they were purchased with joint funds then the wife can carry over 50% of the loss. This is the most common situation.

If the husband solely provided the funds, there is no carryover.
If the wife solely provided the funds, there is a 100% carryover.

Look at PLR 8510053 and its cites. Here is one snip.

In the absence of any express statutory language, only the taxpayer who sustains a loss is entitled to take the deduction. See Revenue Ruling 74-175, 1974 - 1 C.B. 52, and Calvin v. United States, 354 F.2d 202 (10th Cir.1965). In the instant case, the capital loss was sustained by your husband.

[oceanlovin'ea]

I believe they were purchased with joint funds. So that would mean that she can take 1/2 of the carryover. Okay.

Thanks for the information.

Linda, EA