Taxes: A Reason to Sell Your Home in a Divorce

Posted by Carlie Berke, CDFA®

April 23, 2019

When it comes to divorce, the limitations on state and local tax deductions, including property taxes, may be an additional reason to consider selling the family residence. This is particularly true in high tax states such as California. The reduced property tax deduction may increase the tax bill of the spouse keeping the home.

The Numbers Don’t Lie

Furthermore, if you have to refinance the family home in order to get your spouse’s name off the mortgage, and your mortgage was over $750,000, under the new tax law, mortgage interest deduction is limited to the amount of interest mortgage value of $750,000. Previously, you could deduct mortgage interest on up to $1 million of mortgage value.

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