Client divorced her husband and so the house in Georgia goes up for sale to split proceeds. This is almost two years ago, and house hasn't sold yet.
Client has now met the love of her life (in Tennessee, where else) and remarried. But the old residence hasn't sold. This situation could "time out" i.e. reach the point where it could sell AFTER the statutory period, such that client has NOT lived in the house 2 years out of the 5 previous to the sale. Should this happen, and the proceeds are split, then client is responsible for her half of the gain.
Prospects for sale any time soon are bleak. So guess what happens? Ex-husband moves BACK into the house and decides he's going to stay there (rent-free of course) until the house sells, because of uninsurable risk and other expenses.
Best I can tell, ex-husband has now re-established his exemption by living in the house, but if it sells outside the statory period, ex-wife still has to pay on her half of the gain, even though ex-husband is off the hook.
Am I correct? Is there any relief for the ex-wife?
Thanks, Snag
Client has now met the love of her life (in Tennessee, where else) and remarried. But the old residence hasn't sold. This situation could "time out" i.e. reach the point where it could sell AFTER the statutory period, such that client has NOT lived in the house 2 years out of the 5 previous to the sale. Should this happen, and the proceeds are split, then client is responsible for her half of the gain.
Prospects for sale any time soon are bleak. So guess what happens? Ex-husband moves BACK into the house and decides he's going to stay there (rent-free of course) until the house sells, because of uninsurable risk and other expenses.
Best I can tell, ex-husband has now re-established his exemption by living in the house, but if it sells outside the statory period, ex-wife still has to pay on her half of the gain, even though ex-husband is off the hook.
Am I correct? Is there any relief for the ex-wife?
Thanks, Snag
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