|
Posted by MaryJo on February 8, 2008, 4:10 pm
Please log in for more thread options
Hello. I have just been to visit the local IRS office about tax
consequences of my upcoming house sale, but I am still uncertain how to
proceed next.
In my divorce four years ago, the deed to the jointly owned house was
given to me, but the decree requires me to pay a certain amount to my
ex-spouse on sale of the house. The amount is $100,000 plus 33.4% of the
gain since the end of 2004.
In the sale, I will have:
Basis $200,000
Amount received: $570,000
Amount I turn over to ex-spouse: $130,000
The IRS agent said that I will receive a Form 1099-S from the title
company, indicating a sales price of $570,000; and that I can file a
1099-S form myself as a "nominee recipient" to indicate that I passed
$130,000 of the sales proceeds to my ex-spouse.
Under these circumstances:
1. What do I use as my basis in reporting the house sale? The entire
$200,000 or just a part of it?
2. Will I be able to claim the full $250,000 capital gain exclusion on
sale of my main house?
3. Will my ex-spouse also be able to claim a $250,000 capital gain
exclusion?
For Question 3, the agent referred me to IRS Publication 523, Selling Your
House, page 15, which indicates that you are "considered to have used
property as your main home during any period when (1) you owned it, and
(2) your spouse or former spouse is allowed to live in it under a divorce
or separation instrument and uses it as his or her main home."
Would my ex-spouse qualify under this rule? How do I determine whether
the law counts him as "owning" when the deed is just in my name?
Many thanks for any help you may provide. I am just trying to get all my
informations in order before visiting the tax attorney because I wasn't
able to get a clear answer on an earlier visit.
--
Message posted using http://www.talkabouttaxes.com/group/misc.taxes.moderated/
More information at http://www.talkabouttaxes.com/faq.html
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by D. Stussy on February 8, 2008, 6:02 pm
Please log in for more thread options
> Hello. I have just been to visit the local IRS office about tax
> consequences of my upcoming house sale, but I am still uncertain how to
> proceed next.
>
> In my divorce four years ago, the deed to the jointly owned house was
> given to me, but the decree requires me to pay a certain amount to my
> ex-spouse on sale of the house. The amount is $100,000 plus 33.4% of the
> gain since the end of 2004.
>
> In the sale, I will have:
> Basis $200,000
> Amount received: $570,000
> Amount I turn over to ex-spouse: $130,000
>
> The IRS agent said that I will receive a Form 1099-S from the title
> company, indicating a sales price of $570,000; and that I can file a
> 1099-S form myself as a "nominee recipient" to indicate that I passed
> $130,000 of the sales proceeds to my ex-spouse.
>
> Under these circumstances:
>
> 1. What do I use as my basis in reporting the house sale? The entire
> $200,000 or just a part of it?
$200,000. You own the whole thing - and she cashed out her share of basis
to you with the $100k (equal to her basis).
> 2. Will I be able to claim the full $250,000 capital gain exclusion on
> sale of my main house?
You didn't tell us how long you actually lived in it. If you have 730 days
in the 5 year period ending on the date of sale, then yes.
> 3. Will my ex-spouse also be able to claim a $250,000 capital gain
> exclusion?
Same as answer #2. However, her basis is zero as she's not an owner. She
excludes the first $100k as a division of property due to divorce, and the
33.4% may be offset by the $250k exclusion or part thereof.
Of course, your numbers appear simplified - in that they don't account for
costs of purchase that were capitalized nor costs of sale. Don't forget
them.
$100k + 33.4% does not equal $130k. Is her share properly computed?
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Harlan Lunsford on February 8, 2008, 6:35 pm
Please log in for more thread options MaryJo wrote:
> Hello. I have just been to visit the local IRS office about tax
> consequences of my upcoming house sale, but I am still uncertain how to
> proceed next.
>
> In my divorce four years ago, the deed to the jointly owned house was
> given to me, but the decree requires me to pay a certain amount to my
> ex-spouse on sale of the house. The amount is $100,000 plus 33.4% of the
> gain since the end of 2004.
>
> In the sale, I will have:
> Basis $200,000
> Amount received: $570,000
> Amount I turn over to ex-spouse: $130,000
>
> The IRS agent said that I will receive a Form 1099-S from the title
> company, indicating a sales price of $570,000; and that I can file a
> 1099-S form myself as a "nominee recipient" to indicate that I passed
> $130,000 of the sales proceeds to my ex-spouse.
Four years ago you say? Well, I don't think I agree with the IRS agent
who advocates giving another 1099-s form to ex spouse. What we have
here is a property settlement, it seems.
Anybody else see it "my way?"
ChEAr$,
Harlan Lunsford, EA n LA
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Stuart Bronstein on February 8, 2008, 6:47 pm
Please log in for more thread options > MaryJo wrote:
>> In my divorce four years ago, the deed to the jointly owned house
>> was given to me, but the decree requires me to pay a certain
>> amount to my ex-spouse on sale of the house. The amount is
>> $100,000 plus 33.4% of the gain since the end of 2004.
>>
>> In the sale, I will have:
>> Basis $200,000
>> Amount received: $570,000
>> Amount I turn over to ex-spouse: $130,000
>
> Four years ago you say? Well, I don't think I agree with the IRS
> agent who advocates giving another 1099-s form to ex spouse.
> What we have here is a property settlement, it seems.
>
> Anybody else see it "my way?"
Seems to me she purchased the property from her spouse, but deferred
payment until the subsequent sale. So her basis is $200,000 plus
$130,000.
Is that what you mean?
Stu
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Seth on February 8, 2008, 11:47 pm
Please log in for more thread options >Hello. I have just been to visit the local IRS office about tax
>consequences of my upcoming house sale, but I am still uncertain how to
>proceed next.
>
>In my divorce four years ago, the deed to the jointly owned house was
>given to me, but the decree requires me to pay a certain amount to my
>ex-spouse on sale of the house. The amount is $100,000 plus 33.4% of the
>gain since the end of 2004.
>
>In the sale, I will have:
>Basis $200,000
Where does the basis come from? Is that the amount that both of you
together initially paid?
What was the value at the end of 2004?
>Amount received: $570,000
>Amount I turn over to ex-spouse: $130,000
That implies that $30,000 is 33.4% of the increase, so the value at
the end of 2004 was around $480,000. Is that correct?
>The IRS agent said that I will receive a Form 1099-S from the title
>company, indicating a sales price of $570,000;
True.
> and that I can file a
>1099-S form myself as a "nominee recipient" to indicate that I passed
>$130,000 of the sales proceeds to my ex-spouse.
>
>Under these circumstances:
>
>1. What do I use as my basis in reporting the house sale? The entire
>$200,000 or just a part of it?
Does your ex-spouse still have ownership interest? It appears that
the amount you pay is for his portion.
>2. Will I be able to claim the full $250,000 capital gain exclusion on
>sale of my main house?
If you've lived there enough recently, yes.
>3. Will my ex-spouse also be able to claim a $250,000 capital gain
>exclusion?
Why do you care?
Seth
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
| Similar Threads | Posted | | Taxes and divorce | April 19, 2006, 12:18 am |
| Re: Sale of house by widow | June 6, 2006, 7:10 am |
| Re: Sale of house by widow | June 13, 2006, 10:48 pm |
| Legal settlement on sale of house > 2 yrs | March 13, 2008, 10:31 am |
| Questionable Unforeseen Circumstance on House Sale | April 28, 2007, 4:44 pm |
| Capital Gains on House Sale from Living Trust | April 12, 2006, 7:55 am |
| Short Term gain vrs long term gain on sale of a rental house | April 11, 2006, 3:31 am |
| Sale of Business Taxes? | January 25, 2007, 2:43 am |
| Taxes on a sale of foreign property? | December 21, 2007, 1:32 pm |
| Taxes on Sale of Property Formerly in Trust | February 19, 2008, 11:05 pm |
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap