What Happens When I Sell The Family Home I Kept After Divorce in Gloucester Township, NJ?
Going through a divorce is never easy, and can be difficult even if both sides are amicable. One of the most contentious points in a divorce is the family home. Even if you haven’t lived there long you may still suffer emotional angst and other stress deciding which spouse will wind up keeping the home. If you paid your former spouse for half of the home’s worth so you could keep the home, but now want to sell, what happens next? Let’s take a look at how this affects your overall finances, your taxes, and other parts of your life in today’s post.
The Taxable Capital Gain in Haddon Township, NJ
The first thing you need to take a look at is the taxable capital gain on the sale of the home following a divorce. The taxable capital gain in New Jersey remains the same as the rules set forth at the federal level. This is only for the sale of a primary home in New Jersey, not a second or vacation home. If you file as a single person you are able to deduct no more than $250,000 of capital gain on the sale of your primary residence. You are able to deduct no more than $500,000 if you filed as married.
You might not decide to sell the family home for years to come following the divorce. No matter when you decide to sell you will need to determine the basis you have in the home before you can calculate the capital gain. According to the IRS, there is no loss or gain recognized when transferring a property between spouses or even former spouses if the transfer of the property occurred because of a divorce. Since there is no loss or gain recognized with the transfer, the basis of the property will not change. Capital improvements made to the home can be added to the basis that you calculate. At the same time, you can deduct realtor commissions and other fees from the price you set for the sale of the home.
The Exit Tax in Camden, NJ The exit tax is one of the most confusing taxes in New Jersey. What many people don’t realize is that the exit tax is not actually a separate tax. The exit tax is used as a method to collect taxes in advance that very well could be due on a property that is going to be sold in New Jersey but is not owned by a resident of the state.
Funds from the sale of the property are collected at the closing so the state can ensure it receives the money and doesn’t go with the former owners who are leaving and choose not to file their final tax return with New Jersey. If you decide to file a non-resident tax return with New Jersey after you move and are owed a refund, you will be issued that refund in the method in which you choose.
Contact a Cherry Hill Family Law Attorney for a Consultation About Sale of Marital Property Post-Divorce in New Jersey Today
If you are thinking about filing for divorce, or if you have already started the divorce process and are dealing with another matter such as child custody, child support, or division of assets, you need to speak with a qualified attorney. The New Jersey family law attorneys at Lois Garber Schwartz, Esq. represent clients throughout the state, including Camden, Cherry Hill, Gloucester Township, Winslow, Pennsauken, Voorhees, Lindenwold, Haddon Township, Collingswood, Haddonfield. We understand how challenging this time can be for you, which is why we will fight hard to protect your interests, and the interests of your loved ones, throughout the legal process. Call us at (856) 375-8989 or fill out our confidential contact form to schedule a consultation. We have an office conveniently located at 1040 Kings Hwy N #202, Cherry Hill, NJ 08034.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.