In a California divorce with sizeable home equity, is there a way for one spouse to buy out the second and

Asked by Jv, California Wed Jan 9, 2008

let the second take their $250K exemption. Also, would there be any real estate tax adjustments?

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Ute Ferdig -…, Agent, New Castle, DE
Wed Jan 9, 2008
Hello Jv. That's a good question and I think you should ask a tax advisor. I understand what you are trying to do but I have never heard that buying out one spouse as part of a divorce triggers capital gains tax liability for the spouse who is bought out. What I have heard is that the spouse who buys out the other spouse ends up with the entire capital gains burden upon selling the house later. Your attorney should be able to advise you regarding the tax consequences of your property division or refer you to a tax attorney for an in-depth analysis. You'd definitely be well advised to get clarity about the tax consequences before you enter into any binding settlement agreements. Best of luck.
Ute Ferdig
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