When preparing for a divorce case in Chandler, AZ, one of the issues that couples must address is the division of property and tax implications during the sale of properties. Since Arizona is a community property state, the way properties are divided, and proceeds shared can be different from other states. In Chandler, all marital properties must be divided equally between the spouses. Community property includes both assets and debts and there are tax implications of property division during divorce.
The timing of a home sale when contemplating divorce is very important as it determines whether you will be required to pay capital gains tax or not. When a couple agrees to sell the property before or during divorce proceedings, the home equity income of up to $500,000 is usually excluded from capital gains tax. However, if you decide to sell your home after a divorce is finalized, the home equity income will be subjected to capital gains tax and only $250,000 excluded.
The transfer of properties between divorcing couples is non-taxable. However, capital gains tax charged on home equity income generated from a successful sale is shared equally among the divorcing couples. If you decide to sell your property in Chandler during divorce, you and your spouse will have a chance to exclude the first $250,000 of gain from the taxable income.
If you are both selling the Chandler property together, you can exclude up to $500,000 of gain from taxable income if that was your primary residence (where you have lived for the last 2 of the 5 years recommended before sale). If it’s any other property apart from the residential matrimonial property such as a vacation or commercial property, you will have to pay capital gains taxes during a divorce.
In case of a buyout, the selling spouse should not worry about paying the capital gains tax since the sale of the property was part of the divorce process. However, if the spouse who has bought you out stays in the property and later decides to sell the property to a third party, they will be charged capital gains tax for that sale. The other option of excluding gains of up to $250,000 from taxations can only apply if one has lived in the same principal property in Chandler for a minimum of two years before selling.
If you have decided to legally end your marriage through a divorce, selling and division of properties are inevitable. If you would like to sell your property in Chandler, get in touch with Liz & Marie for a fast, reliable, and confidential home sale. Selling your home when undergoing divorce requires high levels of privacy and that’s what we guarantee at competitive offers and fast home closing.
About Liz & Marie
Liz & Marie are the area’s leading real estate solutions company. We successfully work with homeowners, buyers, sellers, real estate agents, and real estate investors, buying and selling all types of residential real estate. We are confident that we can find the right property or solution for you, whether you have a house to sell, are looking to buy your next investment property, or are looking for your family’s “forever home.” We can share our knowledge so that you can make the best decisions for your situation and we are dedicated to making everyone’s experience a smooth and successful process.
Liz & Marie specialize in buying and selling your home at the price, and on the timeline, that works for all of us. Our extensive knowledge of real estate investing and a large network of real estate investors nationwide allows us to offer more buying choices and a wide variety of selling options for all types of home buyers and sellers, including financially distressed homeowners. Our mission is to work hand in hand with all parties and to handle every situation with the utmost professionalism and care.
We are thrilled to be a part of this next chapter in your life. Our commitment to excellence starts with treating you and your transaction with the utmost care and professionalism. We know that buying and selling a home is one of the biggest decisions you’ll ever make and we are humbled that so many homeowners choose us to join them on their journey. Let us lead the way and earn your business today.
We may be Crazy Liz and Wacky Marie but together we can do anything. Our combined experience in real estate has given us tons of lessons and has provided us the opportunity to help many homeowners! We are always striving to learn more and help others!
Let us know how we can help you today!