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Category: Tax
Satisfied Customers: 3820
Experience:  over 40 years experience in tax matters
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In 2010 i was divorced and kept the house. The agreement was

Customer Question

In 2010 i was divorced and kept the house. The agreement was to pay the ex half the equity n the home. When the payment was due, there was no equity to the house due to the market, but the judge said i still had to pay. This is a major loss to me and i need to show this loss on my taxes. The ex did not use the money i paid her as income on her taxes. Can I deduct this as capital gain loss. I sure need this write off.
Submitted: 4 years ago.
Category: Tax
Expert:  CGCPA replied 4 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

Unfortunately, there is no tax deduction available to you from this circumstance. The IRS rules do not permit the deduction of a loss on a main home. They, like the court, will view this as simply a distribution of assets between spouses incident to a divorce. The only plus I can offer is that you basis in the home has changed and will reduce the taxes on any future gain if you sell at some future date.