NEW YORK: Hartog v. Hartog 605 N.Y.S.2d 749 (1993) Selling the marital residence, Taxes

Selling the marital residence, Taxes

selling the marital residence, taxes
selling the marital residence, taxes

The Hartog case stands for the principle that when the marital residence is sold, the spouse’s distributive share will be reduced by the taxes. That will include capital gains taxes, if any. The capital gains exclusion for a married couple in New York is about $500,000. So if the difference between the selling price and the basis is more than $500,000, you will likely owe capital gains tax.  There may be other applicable taxes, such as transfer taxes and the mansion tax (if the home is more than $1 million dollars) and other taxes. The parties are usually ordered to split the tax pro rata, according t their income.
But this does not come as a big surprise. It would seem only fair that a couple should split not just the proceeds from the sale but any reasonable costs associated with this sale. Though, there is case law on this is it suggests that under certain circumstances a party might feel they are not obligated to have to split the taxes but instead should only enjoy the spoils of the sale.
# selling the marital residence, taxes
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