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Subject Author Date
capital gains questions ageldman 03-07-2007
Posted by ageldman on March 7, 2007, 4:29 am
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 Hopefully these are simply questions to answer.

Question 1. A married couple have lived together for 8 years
in a home that is titled in the husbands name only. He
bought the home for $163k many years ago. The home is now
worth over $600k. Is he entitled to the $500k capital gains
exclusion if his wife is not on the title?

Question 2. If not, is it as simple as putting her name on
the title and then turning right around and selling?

Question 3. This is unrelated to the above questions. I
understand that there is a recording fee charged for
changing a title. Are there any transfer taxes that need to
be paid if either a spouse is being added or removed from a
title.?

Thanks,
Adam

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Posted by bono9763@yahoo.com on March 7, 2007, 11:45 pm
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 ageld...@mindspring.com wrote:

> Hopefully these are simply questions to answer.
>
> Question 1. A married couple have lived together for 8 years
> in a home that is titled in the husbands name only. He
> bought the home for $163k many years ago. The home is now
> worth over $600k. Is he entitled to the $500k capital gains
> exclusion if his wife is not on the title?
>
> Question 2. If not, is it as simple as putting her name on
> the title and then turning right around and selling?
>
> Question 3. This is unrelated to the above questions. I
> understand that there is a recording fee charged for
> changing a title. Are there any transfer taxes that need to
> be paid if either a spouse is being added or removed from a
> title.?

1. Only one spouse has to be on the title to claim full MFJ
exemption of $500K, but both spouses have to have lived in
the home at least 2 of the last 5 years.

2. Not necessary to change title.

3. Not sure what you mean by a transfer tax. Married people
can gift an unlimited amount of property to one another with
no gift tax consequences, if that's what you're asking.

<< ======================================================= >>
<< 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 (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Stuart A. Bronstein on March 7, 2007, 11:45 pm
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ageldman@mindspring.com wrote:

> Hopefully these are simply questions to answer.
>
> Question 1. A married couple have lived together for 8 years
> in a home that is titled in the husbands name only. He
> bought the home for $163k many years ago. The home is now
> worth over $600k. Is he entitled to the $500k capital gains
> exclusion if his wife is not on the title?

Under section 121 you get the $500,000 exclusion if either
if you owned the home and both of you lived there for the
requisite time period.

> Question 2. If not, is it as simple as putting her name on
> the title and then turning right around and selling?

N/A

> Question 3. This is unrelated to the above questions. I
> understand that there is a recording fee charged for
> changing a title. Are there any transfer taxes that need to
> be paid if either a spouse is being added or removed from a
> title.?

You don't say what state you are in, and that could make a
difference. In California transfers between spouses are
exempt from the documentary transfer tax.

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 (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by ltsllc on March 7, 2007, 11:45 pm
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ageld...@mindspring.com wrote:

> Hopefully these are simply questions to answer.
>
> Question 1. A married couple have lived together for 8 years
> in a home that is titled in the husbands name only. He
> bought the home for $163k many years ago. The home is now
> worth over $600k. Is he entitled to the $500k capital gains
> exclusion if his wife is not on the title?
>
> Question 2. If not, is it as simple as putting her name on
> the title and then turning right around and selling?
>
> Question 3. This is unrelated to the above questions. I
> understand that there is a recording fee charged for
> changing a title. Are there any transfer taxes that need to
> be paid if either a spouse is being added or removed from a
> title.?
Q1. As long as they are 1. filing a married filing joint tax
return, 2. the home was the principal home of both of them
for at least 2 of the last 5 years, and 3. neither spouse
has sold a home more than once every 2 years, then the wife
is treated as also owning the home so together they get the
$500,000 exclusion on their joint tax return,

Q2. See Q1 above.

Q3. Sorry, I don't know.

<< ======================================================= >>
<< 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 (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by ageldman on March 10, 2007, 2:11 am
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> ageld...@mindspring.com wrote:
>> Hopefully these are simply questions to answer.

>> Question 1. A married couple have lived together for 8 years
>> in a home that is titled in the husbands name only. He
>> bought the home for $163k many years ago. The home is now
>> worth over $600k. Is he entitled to the $500k capital gains
>> exclusion if his wife is not on the title?

> Under section 121 you get the $500,000 exclusion if either
> if you owned the home and both of you lived there for the
> requisite time period.

>> Question 2. If not, is it as simple as putting her name on
>> the title and then turning right around and selling?

> N/A

>> Question 3. This is unrelated to the above questions. I
>> understand that there is a recording fee charged for
>> changing a title. Are there any transfer taxes that need to
>> be paid if either a spouse is being added or removed from a
>> title.?

> You don't say what state you are in, and that could make a
> difference. In California transfers between spouses are
> exempt from the documentary transfer tax.

We're living in Maryland. I've gotten conflicting answers
from different people at my county land records office.
What a surprise. I do get the impression though that there
are no transfee taxes to be paid since there is no actual
sale of the property taking place.

Thanks everyone for your input.

Moderator:
Just sell the house. Adding your wife's name is not needed.

<< ======================================================= >>
<< 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 (2006) - All rights reserved. >>
<< ======================================================= >>

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