Couples headed for divorce have quite a bit to think about and you can add the sale of the family home to that ever-growing list. Selling a home in divorce should never be done on a whim or without performing due diligence. This is a trick process that can have dire financial consequences if you do not know what to expect prior to selling the home.
One of the first things you must look into is the actual ownership of the home. Does the deed have both of your names on it? Are you the only one listed as the owner? Is your spouse the only person listed as the owner on the deed? But, if the property was purchased by one person and used by both, there might be a problem to solve.
When the house is ready to be sold, you will want to know how the assets will be divided. The assets will first be used to help pay off any mortgage debt left on the home. In almost all instances, the assets from the sale remaining after any other liens have been paid are typically divided equally between the couple.
Couples who are married and file jointly will be able to exclude up to $500,000 of profit from the sale of their home in divorce from being taxed. They both had to have owned the home for at least two years and had to have lived in it for two of the last five years. If one person from the marriage meets this requirement, but the other does not, the person who meets it can have up to $250,000 excluded from taxes.
Headed for divorce in New York? An experienced divorce attorney can answer all of your questions about selling the family home in divorce, making the process easier to understand.
Source: Our Family Wizard, “Selling a Home During Divorce: What to Consider,” accessed July 28, 2017