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Stephen G.
Stephen G., Financial Advisor
Category: Capital Gains and Losses
Satisfied Customers: 7097
Experience:  Senior Tax Expert; CPA/PFS(retired)Personal Financial Planner; Small Business & Professional Mergers & Acquisitions
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Looks like i'm getting the house in the divorce. I will need

Customer Question

looks like i'm getting the house in the divorce. I will need to sell it though. If I reinvest the profits by buying a condo (minus 250,00) will I have to pay capital gains? How long to I have to buy new residence?
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  Stephen G. replied 1 year ago.

There are no more re-investment requirements as a way to defer capital gains taxes on the sale of your personal residence. You will acquire 100% of the existing tax basis in the property as a result of the divorce.

If you sell your home after the divorce, you will receive $250,000. of the total gain tax free. Any additional gain will be taxed as long term capital gains.

If your potential gain exceeds the $250,000., you may want to negotiate selling the home before your divorce with you receiving 100% of the proceeds as part of the divorce settlement. In that situation where both you & your soon-to-be ex-husband sell the home, you would be entitled to the full $500,000. exemption of the gain.


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