Discussion:Property of Spouse in Divorce
From TaxAlmanac, A Free Online Resource
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
Discussion Forum Index --> Tax Questions --> Property of Spouse in Divorce
| 12 March 2007 | |
| Tax client (she) divorces. Ex-spouse has property in his name only and is sold to tax client at the time of divorce. Specific amount/sale is identified in the divorce documents. Can she use the cost as her basis? It was specifically identified as a sale (she got the property at a low price as he had nothing else) and my thoughts are that he should carry the basis from original purchase to sale to spouse?? | |
| 12 March 2007 | |
| If I understand it right, you are thinking that the transfer of the property from the ex husband to your client was a property settlement, though the value of the property was too great so your client sent some money the ex husband's way...the net transaction being the actual property settlement. Therefore, client get's cost basis in property.
I tend to agree with this treatment if it weren't for the sale treatment in the divorce papers. It may have been negotiated during the divorce so that the husband received a tax loss on the property transfer (i.e. your client didn't have to send as much cash the ex's way). I'm afraid I'm not much help other than to verify the situation is problematic. I might start by asking the attorney why the settlement was papered as a sale. Good luck. | |
| 12 March 2007 | |
| Her basis in the property is what she paid for it. Get the amount from the divorce papers. | |
| 13 March 2007 | |
| If the sale occurred prior to the final divorce decree or within six-years of that date, the sale would be nontaxable and his basis would carry over to her. | |
| 13 March 2007 | |
| The "sale" between tax client and ex-spouse occured during the final divorce decree and is specifically written in the decree. The property was later sold by tax client to a 3rd party (within 2 years of "sale"/divorce). Would like to use the divorce decree amount for her basis. | |
| 13 March 2007 | |
| Sale price will not be basis. Instead, his basis carries over to her. | |
To join in on this discussion, you must first
log in.
