Capital gains on separate property in Divorce


B

birdman1660

I am presently in the middle of a divorce. In 2005 my
parents sold land purchased prior to the marriage that was
held in my brother's and my names. I am still filing jointly
this year. Should the capital gains be paid from these
proceeds being held separately and will paying it from joint
assets create a comingling of these gains?

Thanks
 
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P

Phil Marti

I am presently in the middle of a divorce. In 2005 my
parents sold land purchased prior to the marriage that was
held in my brother's and my names.
If you read the above paragraph as if you had no working
knowledge of the situation, I think you'll agree it's a
challenge. I'm going to assume that this is property titled
to you and your brother before you, the inquirer, were
married to the spouse you're now divorcing. How your
parents sold property they didn't own is beyond me.
I am still filing jointly
this year. Should the capital gains be paid from these
proceeds being held separately and will paying it from joint
assets create a comingling of these gains?
There's no tax issue. Talk to your divorce lawyer.
 
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S

Stuart A. Bronstein

I am presently in the middle of a divorce. In 2005 my
parents sold land purchased prior to the marriage that was
held in my brother's and my names. I am still filing jointly
this year. Should the capital gains be paid from these
proceeds being held separately and will paying it from joint
assets create a comingling of these gains?
This is much too complicated to deal with here.

First of all, to answer your specific question it depends on
the laws of the state(s) you and your parents live in.

More important in my mind - why was the property in your and
your brother's names? Was it really your parents' property?
Were they living there? Is their tax bracket lower than
yours?

It could be that you and your brother were really holding
the property in trust for your parents, and that any income
(and consequent tax) on the sale belongs to them.

Stu
 
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