Speculative gain on house sale after divorce

If a spouse sells his or her share of the shared house, from which he or she has already moved out, to his or her ex-spouse after the divorce, this can lead to a taxable speculative gain.

If a spouse sells their share of a shared house to the former spouse who continues to live in the house after the divorce, this can lead to a taxable speculative gain. The ten-year speculation period for real estate only does not apply if the property sold is still used for own residential purposes in the year of sale. However, because the plaintiff had already moved out of the shared house before the divorce, the Federal Fiscal Court did not consider this requirement to be met.

Even the facts that the joint children continue to live in the house and that the plaintiff's ex-wife had threatened to foreclose in the event that he did not sell his share to her do not change the fact that a taxable speculative gain arose. Ultimately, the plaintiff had voluntarily decided to sell his share and the minor children were to be allocated to the household of the parent caring for them. In order to avoid such consequences in other cases, the only options are therefore to wait for the speculation period to expire or to at least maintain an active secondary residence in the old home until the sale.