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When Selling Your Home in a Divorce, Who Pays Capital Gains Tax?
When Selling Your Home in a Divorce, Who Pays Capital Gains Tax?

Yahoo

time4 days ago

  • Business
  • Yahoo

When Selling Your Home in a Divorce, Who Pays Capital Gains Tax?

Divorce is never simple, and that's particularly true when a home is involved. While property division is often hashed out during settlement talks, many divorcing couples don't anticipate the potential tax consequences that can come with selling the marital home. Chief among them is the capital gains tax, which can apply when a home is sold for more than its original purchase price. Luckily, understanding how capital gains exclusions work, how the timing of a sale affects taxes, and who's responsible if one spouse keeps the home can help divorcing couples avoid costly surprises. What the capital gains tax exclusion means—and why timing matters in divorce When you sell your primary home for more than you originally paid, the profit—known as a capital gain on real estate—might be subject to taxes. How much you owe is based on the gain. However, most homeowners qualify for a capital gains exclusion, which can reduce or eliminate the amount they owe. To qualify, though, you must live in the home as your primary residence and have lived in it for at least two of the past five years. Plus, you can claim the exclusion only once every two years. Individuals can exclude up to $250,000. Married couples filing jointly can exclude up to $500,000. In a divorce, the timing of the home sale can make a big difference. Depending on when you sell the home, and who meets the ownership and residency requirements, will determine if and how much of an exclusion you can claim. This is why it's important for divorcing couples to consider their timetables as part of the broader financial strategy. Selling too late could result in a larger tax bill, especially in areas where home values have appreciated significantly. There's been ongoing debate among lawmakers about potential changes to capital gains rules, particularly in response to the housing affordability crisis, so staying informed about tax policy changes is also wise. If the home is sold before the divorce is finalized From a tax perspective, selling the home before your divorce is finalized is often the most efficient route, since married couples can take advantage of the full exclusion amount ($500,000). You just need to file a joint return and meet the other requirements. The IRS does not take divorce pending proceedings into account. What matters is your marital status at the time of the sale. As long as you are legally married when you sell the home, the full exclusion will apply. This can result in substantial tax savings when your home has appreciated significantly in value. While the proceeds from the sale will still need to be divided as part of the divorce settlement, the tax treatment of those proceeds is generally more favorable when the sale happens before the split is official. So whether your divorce is amicable, mediated, or somewhere in between, it's worth having a conversation about timing the sale strategically since selling the home earlier in the process could reduce your joint tax liability—and leave more money on the table for both parties to divide. If the home is sold after the divorce is finalized Once the divorce is final, the couple no longer qualifies for the $500,000 exclusion as a unit. Instead, each spouse may individually qualify for the $250,000 exclusion—but only if they meet the ownership and residence test individually. There are other potential problems when selling postdivorce. One spouse might not qualify if they moved out of the house years before the sale, which might commonly happen when a couple splits up. Another issue arises when the title to the home changes after the divorce. If the home is transferred into the name of one spouse only, and that person sells it later, the entire capital gain might be attributed solely to them (even if both spouses shared in the home's appreciation during their tenure there). That could lead to a much higher tax bill. For example, let's say the home increased in value by $600,000 after it was purchased. If only one spouse is on the title and only that spouse qualifies for the $250,000 exclusion, they could be taxed on the remaining $350,000 in gains—a potentially significant financial hit. If one spouse keeps the house after divorce In this case, the capital gains tax doesn't apply right away since there was no sale. Instead, taxes will come into play down the road whenever the spouse eventually sells. Here's why this matters: Unless the home's cost basis (the original purchase price, plus any major improvements) is adjusted during the divorce settlement, the person who keeps the house inherits the original cost basis. That means if the home increases significantly in value over time, they could be hit with a larger tax bill—especially if they only qualify for the individual rather than the exclusion available to married couples. Another common arrangement is where one spouse keeps the house and the other receives different assets, like retirement accounts or investment portfolios. While this can be a fair exchange at the time of divorce, it might lead to uneven tax consequences later. The spouse who keeps the house could face a larger tax burden in the long run, depending on how much the property appreciates. Because of these complexities, it's wise for divorcing homeowners to consult a CPA or a divorce-focused financial planner before finalizing any agreement involving the home. What seems like a clean trade at the moment could result in a costly surprise down the line if the capital gains on real estate aren't properly accounted for. Related Articles Pete Davidson and Elsie Hewitt Announce They're Pregnant With Their First Child—Just Months After They Moved in Together 36.1% of Homeowners in Tennessee Will Face a Hidden Home Equity Tax If They Sell Every Smart Buyer Does This Before Closing — If Your Agent Says Skip It, Think Twice Solve the daily Crossword

3 ways a reverse mortgage can supplement your Social Security
3 ways a reverse mortgage can supplement your Social Security

CBS News

time18-07-2025

  • Business
  • CBS News

3 ways a reverse mortgage can supplement your Social Security

Retirement planning has become increasingly complex as Americans face longer lifespans, rising healthcare costs and concerns about Social Security's long-term sustainability. While Social Security remains a cornerstone of retirement income for most Americans, the average monthly benefit, which is currently $1,976, often falls short of covering all living expenses. As a result, many retirees find themselves in a financial squeeze, including those who are "house rich but cash poor" – meaning those who are sitting on a significant amount of home equity but struggling with monthly cash flow. For decades, the conventional wisdom regarding homeownership was simple: Pay off your mortgage before retirement and live debt-free in your golden years. However, this approach can leave retirees with substantial wealth tied up in their homes while facing monthly budget constraints, especially in today's inflationary environment, where the prices of essentials are growing. And, the irony of that is stark. You might own a $400,000 home outright but still worry about affording groceries or prescription medications on a fixed income. This is where reverse mortgages enter the conversation as a potential game-changer. With a reverse mortgage, retirees have the option to convert their home's equity into usable income while continuing to live in the home. For homeowners aged 62 and older, this can bridge the gap between Social Security benefits and the lifestyle they want to maintain in retirement. But how does that actually work? Learn how a reverse mortgage can help supplement your retirement income now. If your finances are stretched thin during retirement, here's how opting for a reverse mortgage can help supplement the money from your Social Security benefits: One option retirees have when taking out a reverse mortgage is to receive regular monthly payments rather than a lump sum loan or a line of credit they can draw from. By opting for monthly payments, retirees are essentially able to turn part of their home equity into a steady cash flow, much like creating a second paycheck with their home's equity. For retirees who are relying solely on Social Security, this can provide much-needed breathing room in the budget. For example, you might use the extra income to cover everyday expenses like food, gas and utility bills or even to enjoy small luxuries like travel or hobbies that make retirement more fulfilling. And, unlike a traditional mortgage or home equity loan, you won't be required to make monthly repayments on the money you receive from your reverse mortgage loan. As long as you stay in your home, keep up with property taxes and insurance, and maintain the property, repayment isn't due until you move out, sell the home or die. Compare today's reverse mortgage loan options and find the right fit today. Major medical issues tend to become more common and more expensive as we age, and as a result, medical expenses are one of the biggest financial challenges retirees face. While Medicare and Medicare supplemental insurance can help offset those expenses, it doesn't cover everything, and when you're reliant primarily on your Social Security benefits, all it takes is an unexpected hospital visit or prescription drug bill to throw off your budget. A reverse mortgage can help by giving you access to a lump sum of cash or a line of credit you can tap when needed for these types of costs. This can be especially valuable for covering out-of-pocket long-term care costs, in-home care or home modifications, like installing a stairlift or walk-in shower, that make it easier to age in place. Having these funds available could also help you avoid draining your retirement savings or turning to high-rate credit cards when surprise medical expenses pop up. If you haven't yet started collecting Social Security, using a reverse mortgage could allow you to delay claiming your benefits. For every year you postpone Social Security past your full retirement age (up to age 70), your benefits increase by approximately 8%. So, if you're 62 or older and considering early retirement, you could use reverse mortgage payments to cover living expenses while letting your Social Security benefits grow. This strategy can result in significantly higher lifetime Social Security payments, potentially allowing you to collect 30% to 40% more than if you claimed your benefits at 62. This strategy isn't for everyone, of course, but it could make sense if you want to lock in a higher Social Security payment for the rest of your life — and you're in good health and expect to live well into your 80s or beyond. A reverse mortgage can be a powerful way to supplement Social Security income and give your retirement budget a little more flexibility. Whether you're looking to cover essential expenses, pay for medical care or want to strategically delay claiming Social Security, tapping into your home equity might help you live more comfortably in retirement. But like any financial decision, it's crucial to understand how a reverse mortgage works and make sure this strategy aligns with your goals before making any decision. Done thoughtfully, though, a reverse mortgage could help you make the most of both your home and your hard-earned benefits.

Modernised Edwardian four-bed across from the park in Harold's Cross for €950,000
Modernised Edwardian four-bed across from the park in Harold's Cross for €950,000

Irish Times

time08-07-2025

  • Lifestyle
  • Irish Times

Modernised Edwardian four-bed across from the park in Harold's Cross for €950,000

Address : 76 Harold's Cross Road, Harold's Cross, Dublin 6W Price : €950,000 Agent : Mullery O'Gara View this property on The owners of this handsome, modernised Edwardian home had been renting in the area before they got the opportunity to buy number 76 on Harold's Cross Road. Moving in straight away, the couple enlisted the help of an architect to update it for family life. The owner laughs, saying she felt like one of the homeowners featured on Grand Designs as she became pregnant during the renovation process – a common trope on the TV show – and her and her husband had to spend some nights in a hotel when they had no water. The sacrifices they made to accommodate those initial works have paid dividends, resulting in a spacious period home in turnkey condition. As well as its convenient location on the south side of the city, the home comes with a big back garden with mature trees to the rear, providing a sense of bucolic peace while being walking distance from amenities. Extending to 190sq m (2,045sq ft) with four bedrooms and three bathrooms, 76 Harold's Cross Road is on the market through Mullery O'Gara, seeking €950,000. It has a D1 Ber. Past the front yard, bordered by low railings, the redbrick terraced property is accessed up two stone steps. Inside, the high ceilings are immediately impressive, as are the ornate archway and ceiling roses in the hallway. The spacious livingroom sits to the front of the ground floor, benefiting from the box-bay window space; it features the original marble fireplace and wooden floors. A second reception room sits behind that with a window to the rear of the property. It is set up as a TV room but could potentially be a study or playroom. The kitchen/living/diningroom is down a short flight of stairs to the rear, in an extension that was added before the owners moved in. They had bespoke white handleless units installed in the kitchen, as well as an island. There is also underfloor heating beneath non-slip tiles. The bright dining area features a pitched roof with Velux windows, and a built-in bench for seating and storage. There is also a utility room and a WC off the kitchen. READ MORE Front livingroom Kitchen Dining area Garden The room opens up to the 33m-long (107ft) west-facing back garden through glazed sliding doors. A raised patio sits directly outside the doors and leads down to the substantial lawn, with mature trees providing privacy. [ I have noticed blistering on my interior walls. What should I do? Opens in new window ] Back inside, a double bedroom and a modern bathroom as well as a shower room are located on the first-floor return, to the rear of the property. The shower room is painted a clean grey with white wall tiles and grey Moroccan-style patterned tiles underfoot, while the bathroom has a full-size bath – handy for young children – and built-in storage and shelving. Up another half-flight of stairs, the main bedroom suite sits to the front of the property; the owners connected a double room to a single room to create an adjoining dressingroom with floor-to-ceiling built-in wardrobes. There is another double bedroom to the rear and an attic room converted into a double bedroom. The owners have decided to move to be closer to work, but say they will miss the community in the area. When they first lived there, around 2013, there was far less going on in the area, the owner says, but they now have summer and Christmas festivals in Harold's Cross Park, which is just across the road. Parents from the local school often meet for coffee at the cafe in the park, the owners say, and assure me it's nothing like the hilarious sitcom Motherland . With young children, they are also able to walk to several activities in the area, including tennis, football and gym classes. There are also plenty of bus routes to the city centre, with journeys taking about 30 minutes.

Pros and Cons of Metal Roofing in Coastal Climates: What Tampa Homeowners Need to Know
Pros and Cons of Metal Roofing in Coastal Climates: What Tampa Homeowners Need to Know

Associated Press

time03-07-2025

  • Business
  • Associated Press

Pros and Cons of Metal Roofing in Coastal Climates: What Tampa Homeowners Need to Know

07/02/2025, Ruskin, FL // KISS PR Brand Story PressWire // With Florida's coastal environment presenting unique roofing challenges, a common question from homeowners is: Pros and Cons of Metal Roofing in Coastal Climates. Salt air, high humidity, heavy rainfall, and hurricane-force winds can all take a toll on roofing materials. That's why Steadfast Roofing is helping Tampa residents weigh the benefits and drawbacks of metal roofs specifically for coastal conditions. One of the top advantages of Metal Roofing in Tampa FL is its durability. Metal roofs are engineered to resist wind uplift, corrosion, and fire, making them ideal for hurricane-prone regions like Tampa Bay. They also reflect solar heat, reducing cooling costs during Florida's sweltering summers. In terms of lifespan, metal roofs can last 40–70 years—much longer than traditional asphalt shingles. However, there are trade-offs. Metal roofing tends to come with a higher upfront cost, and without proper coatings or expert installation, it can still corrode over time—especially near saltwater. Noise during storms is another common concern, although modern insulation methods often mitigate this. Tampa homeowners exploring residential roofing Tampa fl options should be aware that metal roofing requires experienced contractors to ensure proper ventilation, flashing, and sealing. Whether you're building new or replacing an aging roof, partnering with a company that specializes in coastal roofing services is essential. Steadfast Roofing provides tailored guidance to help homeowners understand if metal roofing aligns with their long-term needs and budget. About Steadfast Roofing Steadfast Roofing is a licensed, family-owned roofing company based in Ruskin, FL, serving the greater Tampa Bay area. Known for honest pricing, high-quality craftsmanship, and deep expertise in coastal roofing systems, they offer a full range of services including repairs, replacements, inspections, and new installations. Their team is committed to helping homeowners make confident roofing decisions backed by superior service. ### Media Contact Steadfast Roofing 9613 Ivory Dr Ruskin, FL 33573 Phone: (813) 851-2276 Website: Source published by Submit Press Release >> Pros and Cons of Metal Roofing in Coastal Climates: What Tampa Homeowners Need to Know

Grow your own at Harold's Cross three-bed with substantial garden for €725,000
Grow your own at Harold's Cross three-bed with substantial garden for €725,000

Irish Times

time27-06-2025

  • Business
  • Irish Times

Grow your own at Harold's Cross three-bed with substantial garden for €725,000

Address : 23 Larkfield Park, Harold's Cross, Dublin 6W Price : €725,000 Agent : Mullery O'Gara View this property on Dating from the 1930s, Larkfield Park was designed by architects Higginbotham & Stafford for the Rathmines Public Utility Society as part of a social-housing initiative for former servicemen and their families known as the Soldiers' and Sailors' Trust Housing Scheme. Architecturally distinctive with redbrick facades, these properties were purposely designed with long back gardens to allow residents to be self-sufficient, grow vegetables and keep chickens. Number 23 Larkfield Park has just launched to the market, and in keeping with the self-sufficient lifestyle it was constructed for, it retains a substantial and private 87ft-long rear garden. It is a 15-minute drive or cycle from St Stephen's Green in Dublin city centre. It appears on the Property Price Register as having last sold in 2016 for the sum of €425,500. 'When we bought, we were only the second owners as the daughter of its original owner, who was a serviceman, had also lived here. But it only had an outside loo, no central heating, and one of the rooms was lit by an original gas light,' say its current owners, who are upsizing due to a growing family. Livingroom Doors in the livingroom open out to a patio Kitchen Doors in the livingroom open out to a patio Diningroom Since then, they have fully modernised the 81sq m (872sq ft) semidetached property. Upgrades such as rewiring and its first ever plumbing – with a new combi boiler – were completed in 2017, and new double-glazed windows were installed as well as a replica front door by Mellott Joinery. A wooden portico replicating the original design of the Soldiers' and Sailors' Trust now frames this door, serving as a reminder of the property's heritage, which is now also echoed in the design of the electrified sliding front gates that offer off-street parking for two cars. READ MORE With advice from an architect brother and the builder, the owners were encouraged to keep as many of the original features as possible. This now means fireplaces (including those upstairs) are all in working order, while woodwork such as picture rails and original doors have also been repaired. New hardwood parquet runs throughout downstairs with the exception of the tiled kitchen and bathroom. The double-fronted semidetached property has a full bathroom inside the front door opposite a well-lit dual-aspect diningroom. Main bedroom Main bathroom upstairs Patio 87ft-long rear garden Opposite that is a lovely livingroom, which is warmed by a Charnwood wood-burning stove. A smart navy kitchen with Silestone countertops and a Belfast sink runs along a wall connecting the living and dining spaces, and a set of double doors opens out from the livingroom on to a brand new patio and barbecue area – installed in 2024, allowing a seamless divide between indoor and outdoor spaces. It's a lovely spot as it looks down the entire length of the garden where owners found lots of dividers for growing vegetables when laying the lawn, as the last occupant was self-sufficient in terms of vegetables. The bulk of the back garden is currently lawned, but should new owners wish to be grow their own, there's a side passage for access and hauling in any gardening accoutrements. Upstairs are three bedrooms; two doubles and a single that sit alongside an all-white main bathroom. The property has a Ber of D2 despite lots of new insulation. Should new owners wish to seal up the fireplaces and install cavity-wall insulation and solar panels, this would likely improve the rating. Larkfield Park is a curving road on the route between Sundrive Road and the Kenilworth Park/Harold's Cross Park junction. It leads directly to Clareville Road, which has two primary schools, so the area is popular with young families. Number 23 is a sensitively restored lovely home that will appeal to those looking for a large back garden close to the city centre. Prices have been rising steadily in the area, an indication of its popularity in recent years. Number 33, a 62sq m house with a Ber of D1 achieved €667,000 in 2024 while number 21, a B3-rated 106sq m house sold for €866,000, also in 2024. Number 23 is seeking €725,000 though selling agents Mullery O'Gara.

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