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Richard
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 54026
Experience:  29 years of experience as a tax, real estate, and business attorney.
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If my wife and I want to live separately but we own a home

Customer Question

If my wife and I want to live separately but we own a home together as JOINT TANENTS IN COMMON, and I am in escrow at this time to purchase another home of my own to live in. What is best for TAX PURPOSES? Or what are the TAX CONSEQUENCES of holding the title to reflect this house as;
1. MARRIED MAN - AS HIS SOLE AND SEPARATE PROPERTY.
2. COMMUNITY PROPERTY.
3. COMMUNITY PROPERTY - WITH RIGHT OF SURVIVOR-SHIP.
Submitted: 1 month ago.
Category: Tax
Expert:  Richard replied 1 month ago.

Hi! My name is Richard & I will be helping you today! It will take me a few minutes to type a response to your question. Thanks for your patience!

Expert:  Richard replied 1 month ago.

There would be no estate tax consequence because upon the death of one spouse, because CA is a community property state, the basis of the property will be adjusted to its fair market value at the date of death so if the property is then subsequently sold at that fair market value, there would be no gain on the sale. If this is going to be a principal residence, then if sold during life, there is a $250,000 exclusion from gain if owned as sole and separate property; but a $500,000 exclusion from gain if owned by spouses. The right of survivorship does not impact the tax issue; rather, it simply means upon the death of the first spouse, title vests automatically in the surviving spouse and you avoid the need for probate.

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