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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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  #1 (permalink)  
Old 03-22-2015, 04:18 PM
Join Date: Jan 2015
Posts: 82
Mike62 is on a distinguished road
Default Separation date and tax implication

I've scoured without success the CRA and Service Canada web sites looking for answer to the following question. Is there a tax benefit for one party in choosing a date to separate?

Separation date is mid-December 2014. I maintain there is no tax benefit. Spouse suspects otherwise and that it would be in my favour.

Your views would be appreciated. And, if you can provide me with a link to a site which has the information that would be much appreciated. Thank you.
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Old 03-23-2015, 03:10 PM
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Join Date: Feb 2013
Posts: 2,836
stripes is on a distinguished road

The separation date is what it is - you can't set it to suit one person. Do you both agree on the date (the date one of you moved out, the date you opened a separate bank account, whatever)?

I'm not sure what tax benefit your ex is thinking of. For some deductions or credits, eligibility depends on whether "at any point during the year" you were married/separated/divorced, so there could be a significant difference between a December 2014 separation date and a January 2015 one, but I doubt there's a difference in terms of tax implications between December and November 2014 (or any other month in the same year). Have you asked her what line on the tax return she is referring to when she is thinking of the benefit to you? Then you could look up the details for that particular line.
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Old 03-23-2015, 03:29 PM
Join Date: Jan 2015
Posts: 82
Mike62 is on a distinguished road

Thanks Stripes.

Both of us agreed on the date of separation. Spouse now suspects me of trying to pull a fast one. She thinks that there is a tax advantage to me if we go with mid as opposed to end of December. My understanding is there is no tax benefit to be gained.

This may all be moot. It seems according to the CRA website we were still married at the end of 2014. We had to be separate for 90 days.
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Old 03-23-2015, 06:51 PM
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KeepSmiling is on a distinguished road

You have to be living separate for 90 days for CRA to consider you separated.

If you separated mid December the 90 days would be up mid March and you can notify them. If your separation date is the end of December, then you can notify CRA that you were separated as at the end of December.

So, the date of separation is not 90 after the actual separation, just that CRA requires you to wait 90 days before notifying them. Just in case you kiss and make up.

I don't think that there is in any advantage to picking the mid month vs the end of the month date. One thing that might be affected is the CCTB - but it is calculated on the 1st of every month, the person receiving it would probably have it increased based on the date of separation if CRA is notified right away.

Last edited by KeepSmiling; 03-23-2015 at 06:54 PM. Reason: because
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Old 03-23-2015, 07:32 PM
Join Date: Feb 2015
Posts: 63
BlueDressInToronto is on a distinguished road

When you do your taxes though it asks your marital status on the last day of the year. So they would be filling separately with a mid December separation date, whereas they would file jointly if they separated in January.

When you notify the CRA after 90 days they still back date to the correct separation date. They just want to make sure you really are going to stay separated.

So depending on how things are structured tax wise she could be right. That doesn't mean it was done on propose though...
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