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socrateaser, Lawyer
Category: Tax
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Experience:  Retired (mostly)
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How will capital gains on the sale of a house be treated in

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How will capital gains on the sale of a house be treated in the divorce ? Thank you. Anyone there??


The division of marital assets is nontaxable, so no matter how the proceeds of sale are divided, there is no tax on the transfer between spouses. And, since married persons are entitled to a $500,000 exclusion from capital gains, divorced parties are each entitled to a $250,000 exclusion (assuming they have lived in the property at least 2 years out of the last 5 before sale), and as Washington is a community property state, so each spouse is entitled to one half of the proceeds of sale -- the only tax that would be incurred on sale would be if the property yields more than $500,000 in net proceeds, and then each spouse would be liable for the tax at either their joint effective tax rate, if spouses file jointly, and at their separate tax rate if they file separately, or as single.


If nothing in the above meets with your unique circumstances, feel free to explain exactly what the situation is, and I'll try to be more precise.

Hope this helps.

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