What is the name of your state?What is the name of your state? California
I am a Mortgage Consultant. A client is getting a divorce and would like to buy out his wife's interest in their house. They have about $300k equity. His lawyer, not his divorce attorney, told him that there would be no adjustment to the cost basis of the house in this scenario.
So the IRS would treat the cost basis as $550k and if he needed to sell the home anytime soon his $250k personal expemption would be used up. Is this true? Is there any way to structure the settlement so it did allow him to add the $150k on to his cost basis and make it $700k ? We would do a refinance to remove her from the mortgage and title and get her the money she wants.
Thanks
I am a Mortgage Consultant. A client is getting a divorce and would like to buy out his wife's interest in their house. They have about $300k equity. His lawyer, not his divorce attorney, told him that there would be no adjustment to the cost basis of the house in this scenario.
So the IRS would treat the cost basis as $550k and if he needed to sell the home anytime soon his $250k personal expemption would be used up. Is this true? Is there any way to structure the settlement so it did allow him to add the $150k on to his cost basis and make it $700k ? We would do a refinance to remove her from the mortgage and title and get her the money she wants.
Thanks