Ending a marriage can understandably be challenging both emotionally and financially. This is particularly true when the family home is at the center of a divorcing couple’s property division dispute. The new tax law has made the decision about what to do with the family home even more complicated for many couples in Pennsylvania and elsewhere.
Some divorcing spouses consider it a top priority to keep the marital home. Others would rather leave the home behind and take other assets instead. Still others prefer to sell the home and split the proceeds, thus allowing both parties to walk away from it.
However, the new tax law decreased how much homeowners can deduct in property taxes. It also reduced the mortgage amount that can qualify for the deduction of interest. As a result, owning a house is now more costly. In addition, married couples can enjoy home-selling gains of up to a million dollars without having to pay taxes on their gains, but for a single individual, only a quarter of a million dollars is exempt from taxes.
These realities under the new tax law are making it more critical than ever before to determine whether selling the marital home is truly the wisest move during the divorce process. In some cases, renting or downsizing are smarter choices, although they can certainly be emotionally difficult to make. An attorney in Pennsylvania can offer the guidance that a divorcing spouse needs to make the most personally favorable decisions possible when it comes to matters such as property division.