Real Estate after divorce

[BillV]

Now, if the property the wife received was actually sold before the divorce became final, then this sale would have to be reported on Sch D and any gain reported on the husbands return. Correct?


BillV

[Roland Slugg]

You're probably not getting any responses because your post is very confusing and unclear. At least it was to me when I read it ... twice. If you will rewrite the facts and clarify what you are asking, I'm sure you will get several replies.

[Burke]

Her seperate property home became rental property for the couple some three or four years ago and they received rental income thru 2012. No rental received or expenses was reported for 2013 except depreciation was calculated for the year.

The other house that was purchased at the end of 2012 was never rented out before Spouse took it back because of the divorce.BillV

1. First house was rental property, goes on 4797.
2. 2nd home never rented out is investment property. Goes on Sche D. Not clear who owned home #2.

[Roland Slugg]

As I understand your revised post, above, none of the real estate was sold ... it was just divided up between H & W. If I have that right ....

Transfers of property between a H & W during divorce are not considered sales, and no gain or loss is triggered or reportable. Instead the entire basis of each item goes with the property itself. Nothing changes except from that point on the property becomes solely owned by just one of the parties.

For the year 2013, when the divorce occurred, the rental income and related expenses should be divided into two parts, allocated to the "pre-divorce" and the "post-divorce" periods. The pre-divorce income and expenses (including depreciation) should be reported 50/50 on each spouse's return, and the post-divorce portion should be reported on the return of the spouse who got the property in the divorce.

In the following year, 2014, all the income and expenses will be reported only on the tax return of the spouse who got the property, and the spouse who gave up the property will have nothing to report regarding that property. The same concept applies for each such items.

Observation: Based on Burke's reply above, I suspect he based his comments on the original version of your post ... since deleted ... and may have been confused by the facts, as I was at first. If no properties were actually sold, there is nothing to report ... on F-4797, Schedule D or elsewhere.