"Mark Bole" <makbo[at]pacbell.net> wrote in message
news:URbCl.17546$as4.12979[at]nlpi069.nbdc.sbc.com...
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I am aware of that. However, it does also deal with the comingling (or
lack thereof) aspect of community property.

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Unless the owning spouse has the discipline to pay for all of the household
expenses from separate income that goes into a separate bank account, I
agree.

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NadCixelsyd <nadcixelsyd[at]aol.com> wrote:

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The idea for a sale to your wife won't work. But you have a
misconception. If you have lived in your house for at least three of
the last five years, you can sell it and have profit of $500,000
excluded, because you are married.

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basis in the new home.

Stu

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"what if" with taxes.


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$200k. Consider the $200k a gift (we are happily married)


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"D. Stussy" <spam[at]bde-arc.ampr.org> wrote in message
news:grbbd3$800$1[at]aux.snarked.org...
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true, but those facts were never given, yet you came to a conclusion that it
remained separate property. that may or may not be the case.

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Mark Bole <makbo[at]pacbell.net> wrote:
- quote -

That's the rule in some community property states. A brief review that
I did indicates that in Texas may comingling does not transmute
separate property to community.

Stu

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D. Stussy wrote:

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IRC Sec. 66 deals with community income, not property ownership.

The point was, if spouses co-habit a personal residence owned by one of
them for a number of years, it seems likely to me that some commingling
would occur, since there are so many expenses of keeping and maintaining
a residence. It may just be the appreciation on the property that
becomes part of the community, for example. (more of a legal issue than
a tax issue, although both apply).

Cixelsyd stated that his wife "has never owned real estate before", the
item I responded to. If in fact she did own some portion of the house
already, that would affect the tax treatment of the sale, if it wasn't
already out of the question for other reasons already given.

-Mark Bole

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"Reggie" <Reggie[at]wantsnospam.com> wrote in message
news:_qUBl.524437$Mh5.174362[at]bgtnsc04-news.ops.worldnet.att.net...
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That means that comingling has occurred. Simply marrying someone and
living with them in a community property state doesn't necessarily comingle
their (pre-marital) assets. Otherwise, there would be no need to have IRC
Section 66.

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"D. Stussy" <spam[at]bde-arc.ampr.org> wrote in message
news:gr71uq$ovc$1[at]aux.snarked.org...
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not if the mortgage has been paid with community assets.

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D. Stussy wrote:

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IANAL, but I have read comments on more than one occasion along the
lines of the following, which I found with a quick web search.

"Increased equity in separate property may become community property in
certain circumstances, and separate property that is commingled with
community property often becomes community property. You should check
your state law and get advice if there are questions. "

-Mark Bole

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"Mark Bole" <makbo[at]pacbell.net> wrote in message
news:s%yBl.22794$YU2.15257[at]nlpi066.nbdc.sbc.com...
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How? As property purchased before the formation of the community, it is
separate property.

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"Can I "sell" the house to my wife for $400k and get a $250k step-up
in
basis (assuming she doesn't sell it for several years)." asks
NadCixelsyd.

No, you can't do that. IRC Section 1041 provides that between
spouses, a transaction that "looks like" a taxable sale, isn't a sale
at all. It's closest to being a gift. There's no gain recognized and
there's no step up. Or step down. The tax basis that the property
had in the hands of the "giving" spouse becomes the tax basis of the
property to the "receiving" spouse.

You should read Section 1041, as quite often it will dictate the
results of transactions between spouses, and the result can be very
surprising.

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NadCixelsyd wrote:
- quote -

Nad, you always have so many interesting tax experiences...

I don't see how *you* could get a step up in basis if your wife owns the
house.

Why would you sell a house for $200K less than it's worth?

Do you live in a community property state? If she lives with you, maybe
she owns more of your house than you think.

-Mark Bole

"The IRS has not issued a definition for taking a position."

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NadCixelsyd <nadcixelsyd[at]aol.com> wrote:

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What you are suggesting is known as a "related-party transaction".
It has no economic substance other than a phantom tax benefit and
would be dissalowed upon audit - which means penalties and interest.

- quote -

Not on your house.

Dick

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25 years ago, I bought a house for $150k. The house is in my name
alone as I was not married at the time. It's now worth about $600k.
Can I "sell" the house to my wife for $400k and get a $250k step-up in
basis (assuming she doesn't sell it for several years).

She has never owned real esate before. Would this qualify for the
first-time buyer program that reduces one's tax liability?

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >