View Full Version : Inherited Property and consequences of filing joint tax returns.
Allys
Sep 13, 2010, 04:46 PM
Husband and wife have been married 41 years. Husband inherited property during marriage. He and his wife lived in house on said property for at least five years. During that time she was the only one who was working. He obtained a loan in order to repair and improve the house. He did not complete improvements. He used the money to return to school. Husband has bought cattle to graze the property and has used them as a write-off on their tax returns. The couple no longer live on the property, but the husband has continued to use it as grazing land for his cattle. When he has sold the cattle, he has kept the proceeds separate from the wife in a separate bank account without her knowledge, until recently. The couple has always filed joint tax returns. Does she have any claim to a share of the inherited property, or of the proceeds from the mineral rights from the property?
ebaines
Sep 14, 2010, 05:53 AM
Does she have any claim to a share of the inherited property, or of the proceeds from the mineral rights from the property?
Are you asking about how the property should be split in case of a divorce? Depends on the particular state. Some treat all husband and wife property as jointly owned, regardless of source. Others say that whatever one partner "brings in" to the marriage belongs to that person, so in those states the default answer is no - the property is the husband's, UNLESS the wife can show that she paid for capital improvements on the property. However, in divorce proceedings anything is negotiable.
I'm curious why you asked this question in the "taxes" forum - please clarify.
ebaines
Sep 14, 2010, 11:59 AM
Allys - it's not appropriate for you to rate my answer as incorrect, given the information you provided (which wasn't much).
The fact that she has been the only income earner is not relevant. From what you've described she has no ownership in the property, even though she was paying for its maintenance and upkeep. By paying his loan balance she bought him an education but did not buld any equity of her own in the property. Filing a joint tax return has nothing to do with any of this. However - as I said in my first response - if they live in a community property state then the rules may be different.
Since this is tax forum, and you are really asking a question about the split of marital assets in divorce, I suggest you ask this in the appropriate law forum. You're more likely to get answers from people more famiiar with divorce proceedings than you will here.
AtlantaTaxExpert
Sep 16, 2010, 07:47 AM
ebaines:
Look at the way the post was worded. It seems to me that you probably answered a homework question for a business law or marital law class.