Take Taxes and Liquidity Into Consideration
You will be subject to potentially higher capital gains taxes if your home has a large capital gain that exceeds $250,000. If you decide to sell the home before the finality of your divorce, you can jointly deduct up to $500,000 of capital gains as opposed to $250,000 if you’re unmarried. However, if you use liquid assets to buyout your spouse’s equity, then you could find yourself short on cash for living expenses. It’s extremely important to review your post-divorce budget.
Determining the Value of the Equity
The buyout for your home is based on its value at the time of divorce. A reputable appraisal professional with experience in divorce valuations should be responsible for the valuation. Finally, you should acquire an estimate of sales commissions and closing costs from a reliable local real estate business or escrow professional.