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Dimitry Esquire
Dimitry Esquire, Attorney
Category: Tax
Satisfied Customers: 36988
Experience:  Experienced Attorney
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My husband and I own a property in Dallas TX in both of our

Customer Question

My husband and I own a property in Dallas TX in both of our names. It is currently being rented now, but we "homestead" the taxes.
We are buying a second property in Michigan where I will live full time. We are not divorcing , but will if one of us finds a mate, we are in our late 50's.
I do not work and have not for years.
My question is can we also "homestead" the taxes on the house in Michigan also if the home is purchased in my name?
Is there an advantage to purchasing the home in my name only? (if it can even be done...as he is the income source).
It seems it may be an advantage because if we are divorced in the future, I could deduct the taxes/interest from my income tax and that would be a big tax benefit to me I believe.
Thanks!
Submitted: 2 years ago.
Category: Tax
Expert:  Dimitry Esquire replied 2 years ago.

Thank you for your question. I will do my best to assist you with your concerns. If you would like me to clarify my answer, I will be happy to do so.

Please permit me to respond to each of your concerns in order.

If you are purchasing the second property, you cannot homestead both. Only ONE property at a time can be 'homesteaded' because that is considered to be the property where you reside as a family unit. Two properties under 'homestead' would be considered tax fraud and could open you and your spouse up to fines, back-taxes, and even criminal charges.

The advantage of one name may be for purposes of asset distribution later. There is no law that requires that both spouses be on title, but your spouse would have to sign a post-nuptial agreement and a waiver under which he would give up all present and future rights to the property if you are listed solely on title. I do not see the benefit to him if he does that.

Good luck.


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Customer: replied 2 years ago.
Thank You for your answer however,

I would like to wait for a real estate attorney who has practiced in Michigan. I have been told by my realtor in Michigan that both he and his wife are able to claim a homestead exemption on the two properties they own in Michigan. I do not know their situation however, both my work and file "married filing separately".
I'd like to find someone here who knows both Texas and Michigan real estate law.

Expert:  Dimitry Esquire replied 2 years ago.
Thank you for your follow-up, Allisa.

A 'homestead' refers to residency, and it refers to a primary property. The answer I provided to you is accurate both under Michigan and Texas law. I can request that Michigan and Texas professionals chime in, but I doubt that they will disagree with my assessment.

Good luck.
Expert:  ratioscripta replied 2 years ago.
Hello Allisa,

I am a Texas-based expert. I have reviewed the information Dimitry has posted and he appears to be 100% on point.

Best of luck - I will turn this back over to him now.
Customer: replied 2 years ago.
Somehow, this couple is able to do it legally in Michigan. How is that?
Expert:  Dimitry Esquire replied 2 years ago.
Thank you for your follow-up.

It may be possible if they formally reside separately and in separate households, meaning that they legally separated via the courts. Then each can have his own homestead, but that would require that each of the spouses reside at the homestead that they are listed under. Beyond that they are likely NOT doing it legally, regardless of what they state to you, because each person or spousal unit is entitled to only one homestead at a time. Anything more is tax fraud.

Good luck.
Dimitry Esquire, Attorney
Category: Tax
Satisfied Customers: 36988
Experience: Experienced Attorney
Dimitry Esquire and 5 other Tax Specialists are ready to help you
Customer: replied 2 years ago.
No, sorry you were both incorrect. The law states in Michigan that if a married couple is filing "married filing jointly" and they live separately and own a home in another state, they may each claim a homestead property exemption. That is what it says on the Michigan property tax info web site!! What happened here?
Customer: replied 2 years ago.
Relist: Inaccurate answer.
Dimitry is incorrect as is Ely regarding a couples ability to both claim a homestead exemption in Michigan. if they own two properties, one in Michigan and another out of state. If their filing status is "married filing separately" they are each able to claim a homestead exemption on one of the properties. I read this on the Michigan tax law/property web site.
Expert:  Dimitry Esquire replied 2 years ago.
Ma'am,

I expressly stated that if you are separated (meaning that you file your taxes as 'married failing separately'), each spouse is permitted to their own homestead exemption, but they have to reside at ach of those locations.

Good luck.
Customer: replied 2 years ago.

11. My spouse and I each own and occupy

separate homes. We file our Federal and State

tax returns as married filing separately. May we

each claim our home?

Yes. Spouses who maintain separate principal

residences may each claim his or her principal

residence unless they file a joint Federal and State

income tax return.

 

I just read your reply Demitry:

 

We are able to live separately but continue to file married filing jointly. As far as I know that is very legal as there is no "legal separation" in Texas.

 

Customer: replied 2 years ago.
Just because we are separate, it does not follow that we are "married filing separately"

We are not!


And you ignored every single time I mentioned the possibility of the filing status as making a difference you IGNORED it.
Customer: replied 2 years ago.
,Just because we are separate, it does not follow that we are "married filing separately"
We are not!
And you ignored every single time I mentioned the possibility of the filing status as making a difference you IGNORED it.
There is no such thing as a married couple in Dallas, TX who are legally separated. I do not believe one needs to be legally separated, but you do need to file your taxes as married filing separately and register to vote there in MI, get drivers license etc.
Expert:  Anne replied 2 years ago.
Hi

I am an Enrolled Agent and have prepared taxes in MI for 25 years.

First, if I understand your situation, (its a little confusing with all of the posts) You are going to buy a home here in MI and your husband is going to live elsewhere, and you want to file jointly. Please correct me if I have this wrong, but that is the premise I am going to use in answering your question

According to MI law, you may only have 1 principle residence (homestead) in the state of MI at a time. This is because principle/homesteaded residences do not pay any school millage in their real estate taxes.

If your Realtor is claiming more than 1 principle /homesteaded property, then either they must be living apart, or they are unaware of the 1 homestead rule

Please see page 17 ofMI-1040CR Instructions

MI is beginning to crack down on people who claim the homestead exemption on more than 1 property. We've been seeing that more & more lately.

As for your filing status, if you file joint for Federal , then you MUST file joint for MI (see page 3 of the above link under "Who must file a joint return.)

Now to TX. Since your home ceased to be either of your personal residence and you state that it is now being rented, this now falls into the category of "investment income" and is no longer eligible for the homestead exemption.

However, if your husband does not live in MI, and he purchases another home somewhere, then yes, you may homestead EACH property, but each of you must be able prove that the residence is their “principal residence”.

I truly hope this information is helpful but please do not rate until you are satisfied. If you want to click on 1 or 2 just click on the continue to work with me button instead. You will then be able to add any other info or respond to what I have posted so far. Rating 3-5 gives me credit and a good rating but you can still converse with me."



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