1031 exchange on premarital property

[betty7755]

What is the name of your state (only U.S. law)? CA
I bought a property with my mom before I was married. I then did a 1031 exchange with this property after I was married. I cashed stocks that I acquired before I was married and put the money toward the 1031 exchange. My spouse claims that he, too, owns the 1031 exchange property. His name is not on the title. However there is a wire transfer into the 1031 escrow account from an equity line of credit held on a property with only his name on the title. There was no written contract to stipulate that he owned any of the property or that I "borrowed" money from him. Is he entitled to the property?What is the name of your state (only U.S. law)? CAWhat is the name of your state (only U.S. law)?

[Ohiogal]

Originally Posted by betty7755

What is the name of your state (only U.S. law)? CA
I bought a property with my mom before I was married. I then did a 1031 exchange with this property after I was married. I cashed stocks that I acquired before I was married and put the money toward the 1031 exchange. My spouse claims that he, too, owns the 1031 exchange property. His name is not on the title. However there is a wire transfer into the 1031 escrow account from an equity line of credit held on a property with only his name on the title. There was no written contract to stipulate that he owned any of the property or that I "borrowed" money from him. Is he entitled to the property?What is the name of your state (only U.S. law)? CAWhat is the name of your state (only U.S. law)?

He doesn't own the 1031 exchange property however he has a marital INTEREST in the property because of the wire transfer into the 1031 escrow account. Also if any of your income is used to pay for the 1031 exchange it would also make it marital.

[nextwife]

Also, if MARITAL income was used to make mtg/tax/maintenance payments on either the 1031 relinquished property or the replacement property, those actions would have created a marital interest

[betty7755]

Thank you for this useful information. What does "marital interest" mean? Does that mean he will get a percentage of the value of the property? If so what percentage is he entitled to if his name is not on the title?

[LdiJ]

Originally Posted by betty7755

Thank you for this useful information. What does "marital interest" mean? Does that mean he will get a percentage of the value of the property? If so what percentage is he entitled to if his name is not on the title?

"Marital interest" is most commonly the equity that accrued in your share of the property during the marriage.

However, due to the 1031 exchange and the separate property that you used to effect the 1031 exchange the marital interest in your case would be a much more complicated calculation.

Most likely you are going to need a forensic accountant to determine the marital interest in the property. The future potential capital gains based on the 1031 exchange is also going to be a major factor in that calculation as well.

Based on this thread and your other thread, it sounds like the two of you have major real estate issues to deal with in your property settlement. You really are going to need a forensic account to help you indentify what is or isn't marital property and to help you come to an agreement.

[betty7755]

Thank you,
This is a very informative response. Indeed, there is a lot of real estate involved. The interesting part is there is NO equity in most of the properties.

[LdiJ]

Originally Posted by betty7755

Thank you,
This is a very informative response. Indeed, there is a lot of real estate involved. The interesting part is there is NO equity in most of the properties.

If a property has no equity, then there is no marital "share". It belongs to the party who holds title, or if owned jointly, as in the case of the condo, you could just sign a quit claim to sign it back to your husband, since the loans are in his name only.

Don't get all het up about dividing property that has no equity, if it truly has no equity.