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QUESTION DETAIL
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My ex-husband and I bought a house together, but my name was never on the deed/loan and now we are going through mediation for a divorce. Unfortunately, we negotiated the settlement and didn't consider the taxes until we were almost done with it. We are not selling the house. The mediation documents allocate a certain percentage of the house to me, which I will receive when it is sold some time in the future. Because I'm not on the deed, I get none of the tax benefits allowed to a homeowner. I'm allowed to reinvest, but only a small amount of net profit (i.e. after tax expenses) from rental income. Are there any tax breaks for me?
ANSWER
The BIDaWIZ Team's Answer:
Is this personal residential property used as a primary residence or rental property? Typically, there is no gain or loss recognized on the transfer of property between spouses, or between former spouses if the transfer is because of a divorce. When a sale occurs, then that can certainly result in a taxable event. However, you should have basis in the property given that you provided money for the purchase and this is part of the marital estate. This will offset the capital gains tax. Also, do you know the depreciation amount if this is rental property?
