Are There Tax Consequences When Dividing the Property During a Divorce?

Generally speaking, most property transfers are tax-neutral. This simply means that that the person receiving the property would not owe any taxes on the property. They also would not receive any tax benefits from the transfer either.

For example, if you are dividing your property and your ex-spouse is keeping the house, he/she wouldn't have to pay income tax or capital gains tax for the transfer. He/she would also be excluded from gift taxes.

If you are selling the house, it gets a little more complicated. You and your ex-spouse can each exclude the first $250,000 of gain from your taxable income. There are other scenarios that could affect the taxes when selling the house. Without knowing more, it would be hard to go into greater depth. Hopefully this gives you a better idea about how the taxes work when dividing the property during a divorce.

For Immediate help with your family law case or answering any questions please call (262) 221-8123 now!