nohardfelines Posted March 8, 2014 Share Posted March 8, 2014 For those of you who have been through this already, I have a couple of questions: A divorced buddy of mine told me that when he divorced his ex and sold his house in the same year, he got eaten alive come tax time. My wife wants to move out, should I consider keeping the house? If she has majority custody, as will likely be the case, can one of us claim each child as a dependent? I heard through a very reliable source, (the internet, which is NEVER wrong) that this was possible? Also, anything I need to watch out for? Trying to get as prepared as possible here, thanks. Link to post Share on other sites
SoleMate Posted March 8, 2014 Share Posted March 8, 2014 Well, I could either share some urban legends, or mislabel my experience as universal truth, but the fact is that only someone who knows the details of your situation can tell you the tax consequences. For example, selling a house MAY result in capital gains which are then taxed. I have no idea whether you would have a capital gain on your house if you sold it. Married couples can exclude $500k of such gain; a single, only $250k. So if you have a high capital gain and are sure you want to sell, you may want to consider selling while still married to benefit from the larger exclusion. This is a greatly simplified example and your specific situation could easily mean the above advice is terrible for you. Etc. Link to post Share on other sites
carhill Posted March 8, 2014 Share Posted March 8, 2014 My wife wants to move out, should I consider keeping the house? If you can afford it and it remains a sound investment, sure. A plus would be that it is a home familiar to your children, as you apparently have one or more. If she has majority custody, as will likely be the case, can one of us claim each child as a dependent? I heard through a very reliable source, (the internet, which is NEVER wrong) that this was possible? Dependents & Exemptions No need to worry about opinions other than those of the IRS Also, anything I need to watch out for? Duplicating deductions if you're married filing separately prior to the divorce being final would be one thing to watch out for. My exW and I didn't have any issues in the tax realm at all. 1 Link to post Share on other sites
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