Table: Protecting Your Gain

A husband going through a divorce in California moves out of the family house, while the wife continues to live there with the kids. Five years later, she sells the home for a $500,000 gain, and they split the proceeds. Here's how much of his $250,000 share the husband will keep, depending on whether the divorce agreement contains a "use of residence" clause allowing him to declare the home as his principal residence for tax purposes.


TAX BITE None $73,250: 20% capital gains, 9.3% state and local taxes

HUSBAND'S $250,000 $176,750 NET SHARE

Data: Ginita Wall

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