Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Selling the Marital Residence: What Are the Tax Implications?

By Melvyn B. Frumkes
September 04, 2003

The marital residence is frequently the most valuable asset found in most divorce cases. Issues of valuation, possession and sale will all involve tax implications. The residence may include a houseboat, a house trailer or the house or apartment that the taxpayer is entitled to occupy as a tenant-stockholder in a cooperative housing corporation. It does not include personal property that is not a fixture. Treas.Reg. '1.121-1(b). Any gain represented by the difference between the present market value or sales price and the adjusted basis will have tax consequences. Such gain, unless excluded, will subject the taxpayer to a capital gains tax ' currently 15%. Thus, being familiar with the new rules on the exclusion of gain from sale of a principal residence is essential.

Exclusion of $250,000 of Gain

Under the Taxpayer Relief Act of 1997, incorporated into amended Internal Revenue Code (IRC or Code) ' 121, each taxpayer, regardless of age, can exclude up to $250,000 in gain on the sale or exchange of his or her interest in the principal residence where the ownership and use test is met, unless an election otherwise is made. IRC' 121 (F).

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

Legal Possession: What Does It Mean? Image

Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.

The Anti-Assignment Override Provisions Image

UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?