Florida couples who are considering divorce may have high net worth.
Especially as couples near retirement, they may see their existing investments, like houses, stocks and the like grow surprisingly large.
They may also acquire a wider portfolio of assets as their expenses start to decline during the Golden Years.
Capital gains tax will apply to most investments
Although there are some noteworthy exceptions, including retirement plans, for the most part, all investments are subject to a capital gains tax.
Basically, this means that a person will pay between 15% and 20% on the difference between the price at which a person acquired an investment and the price at which he or she sold it.
In practice, a Broward County going through a divorce needs to remember that if they should choose to hang on to a particular asset, he or she may have to pay a chunk of that asset’s value should he or she decide to sell it down the road.
This is so even though divorces themselves do not trigger the capital gains tax so long as a properly drafted divorce settlement or order divides the property.
Special considerations apply to the family home
Many Floridians may already know that, for their personal homes, they may be entitled to an exemption from the capital gains tax of up to $250,000, or $500,000 if claiming the exemption while married filing jointly.
In other words, an individual owner can under certain circumstances keep up to $250,000 in equity in the house tax free.
A couple of obvious exceptions to this rule are that it does not apply to investment properties and it may not apply in full should a couple have enjoyed a large gain on the home.
There are some other important legal considerations that a Fort Meyers resident who is going through or who has just been through a divorce must take account of with respect to this important tax exemption.
