numbnms
Platinum
Reged: 10/18/07
Posts: 642
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Situation: Wife and I are sepreated. Mississippi does not recognize seperations you are either married or unmarried. Mississippi is a equitable distribution of property state.
While seperated my wife has bought a new home, put 20,000 down on said home. The deed is in her name only (Not sure how this was done as in MS if you are married both people have to sign the deed even if both are not on the note).
The $20,000 question is this: Did she just give me equity in her new home? I don't want her money but it would be nice to have a little ammunition to fight back with for a change. It seems all I do is pay even though she had the affair and left the marrage.
If anymore information is needed please ask away.
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Forget waiting for the storm to pass
Learn to dance in the rain
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gigi
Platinum
Reged: 11/06/06
Posts: 4790
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Where did she get the $20K from to put down on a new house?
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numbnms
Platinum
Reged: 10/18/07
Posts: 642
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ONly place i can come up with is her parents, Gigi. I don't know, but you can only be gifted $10,000, so there should still be something left, they also gave her $15,000 earlier this year who know what that was for. So far they have given her $25,000 and the big problem with our divorce is they think I should pay her enough to pay them back ontop of 50% of the equity and none of the debt.......damn getting mad again so stopping.
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Forget waiting for the storm to pass
Learn to dance in the rain
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Jada
Platinum
Reged: 06/02/07
Posts: 3219
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[quote]ONly place i can come up with is her parents, Gigi. I don't know, but you can only be gifted $10,000, so there should still be something left, they also gave her $15,000 earlier this year who know what that was for. So far they have given her $25,000 and the big problem with our divorce is they think I should pay her enough to pay them back ontop of 50% of the equity and none of the debt.......damn getting mad again so stopping. [/quote]
Uh, it's $10K per person, per year. So if both of her parents are alive, they don't have to pay tax on it. And it is the person who gives the gift that pays the tax, not the person receiving the gift (unless they have changed that since I went to college).
And if she got the money from her parents and the two of you have never lived together in the house she bought with the gift (which are considered separate unless co-mingled) from her parents, chances are it's a non-issue. You could make it one, but you aren't going to get far. Although, in the middle of a divorce isn't a good time to make a major purchase like that. It can just complicate the issue. Your posting of wanting to use it as leverage is proof of that.
Now, if you can prove that she used marital funds (such as she took money out of a joint account or took out a home equity loan on the marital home), then the house she bought is subject to division.
If they are asking you to pay them back for the money that they gave her to buy the house, then ask for half the equity of the house.
Any equity payout should be made after all marital debt (and I would contest the money that they gave as a marital debt) has been subtracted from the equity. This will mean, if you are keeping the house, that you will be taking on all of the debt. And if the debt has your name on it, it's probably smart to do so, as she just may not pay.
Edited by Jada (04/04/08 09:00 PM)
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gigi
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Reged: 11/06/06
Posts: 4790
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Her parents can give any gift they want to her without limitation. The only thing is that over a certain amount, they MIGHT be taxed on it. That amount always used to be $10,000, but it was $11,000 per giver, per year, in 2002, 2003, 2004 & 2005 and it raised to $12,000 in 2006 & 2007. The IRS has determined that in 2008, the exclusion will remain at $12,000.
So if her parents have given her a total of $24,000 in 2007 and another $24,000 so far in 2008, there are no gift taxes, no consequences to it.
And that's only if they decide to pay taxes on it. There is a lifetime exclusion that they can eat into (long & complicated, it always used to be $600,000 per person) that will ordinarily apply in thier estate after they die, but people are allowed to take it before they die if they choose. So if they gave her $25,000 so far this year, or $35,000, or whatever, then ONE of them would have to take $1,000 (or or $11,000) out of thier lifetime estate tax exclusion.
This was a Bush tax reform and they're waiting to see if the reforms remain. If so, then it's quite possible that there will no longer be ANY gift or federal estate tax at all and that people will be allowed to give away thier money (assuming they've already paid income taxes on it) without taxes. Not a bad idea if you like the idea of being able to keep what you earn and give it to family if you choose rather than spending it all.
So it's QUITE possible that they've given her all of this.
They won't be able to double-dip, forcing you to pay back gifts that they gave solely to her, but you will probably lose half the equity in your own house, because you and she earned that when you were married, so it's a joint asset.
I know it's upsetting to think of, but you don't get to take part of a house that she bought with someone else's money. And she DOES get to get part of a house that was bought with money earned by a partnership while she was an active partner in the partnership.
Sorry.
Now, if you find out that she took an advance on your credit card and bought the house with that as a down payment, and so you had something do DO with the house even if it was not your choice to buy it, then you might deserve to get something out of it. But realistically it doesn't sound like that's gong to happen.
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theanswerguy
Platinum
Reged: 04/12/07
Posts: 2144
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It would depend on where the funds came from . Gifts are considered separate property and are not subject to distribution . Any marital funds used would make the property part marital/part separate . You could catch a break in the final distribution of the marital property as separate property apportioned to a spouse is a factor in equitable distribution , that the party with separate property needs less of the marital estate .
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Never let your sense of morals get in the way of doing what's right. Isaac Asimov
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dkc
New
Reged: 10/27/07
Posts: 24
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Gigi is right on with her answer below. We just went through this in our family. I added a few notes in there too.
<<<<<<<Her parents can give any gift they want to her without limitation. The only thing is that over a certain amount, they MIGHT be taxed on it. That amount always used to be $10,000, but it was $11,000 per giver, per year, in 2002, 2003, 2004 & 2005 and it raised to $12,000 in 2006 & 2007. The IRS has determined that in 2008, the exclusion will remain at $12,000.
So if her parents have given her a total of $24,000 in 2007 and another $24,000 so far in 2008, there are no gift taxes, no consequences to it.
And the gifters can give that much to AS MANY people as they want. So if there was a family of say 3 (mom & 2 kids) they could give each of them 12K per year. Possibley 72K in a short time - end of one year into the beginning of another for example. Not sure if the monies gifted to minors could be used towards a house though.
<<<<And that's only if they decide to pay taxes on it. There is a lifetime exclusion that they can eat into (long & complicated, it always used to be $600,000 per person) that will ordinarily apply in thier estate after they die, but people are allowed to take it before they die if they choose. So if they gave her $25,000 so far this year, or $35,000, or whatever, then ONE of them would have to take $1,000 (or or $11,000) out of thier lifetime estate tax exclusion.>>>>>
<<<<<This was a Bush tax reform and they're waiting to see if the reforms remain. If so, then it's quite possible that there will no longer be ANY gift or federal estate tax at all and that people will be allowed to give away thier money (assuming they've already paid income taxes on it) without taxes. Not a bad idea if you like the idea of being able to keep what you earn and give it to family if you choose rather than spending it all. >>>>
Warning- Political Comment Follows :)
Of those who have to pay tax on the amount over the exclusion on the inheritence tax, which I believe is about 1.5 million for a couple now,(which only affects less than 2% of estates)have NEVER paid taxes on about 60% of what they pass on. This is because it is in long term capital gains for stocks, land, or other investments that have been held "indefinetly".
Even People like Bill Gates Sr. & Warren Buffet are saying we should keep the inheratence tax and even increase it. That should be a sign I think.
Off Soap Box now.
DKC
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numbnms
Platinum
Reged: 10/18/07
Posts: 642
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Thanks everyone, like I said I don't really want anything from her house but there are still other factors invovled in the purchase of the house that maybe I can use. I'm damn tired of being bent over by our court system simpley because I am male and have made a good living.
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Forget waiting for the storm to pass
Learn to dance in the rain
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