Third party ownership
This FAQ explains what to do when a third party owns a portion of an asset. This typically can apply with real estate, where, for example, a party’s parents own a portion of the property. It can also apply with a business, where, for example, there are partners who own a portion of the business. […]
Why are the mortgage (and other expenses) not showing up on the financial affidavit or Budget Report?
Most likely, the reason is that the property has been indicated to be a rental income property. You can see that on the more info screen for real estate, in the section for rental income property. The property can be entirely rental property, in which case the mortgage is subtracted from the rental income of […]
What if a refinancing is buying out separate property?
All refinancing proceeds are treated as marital property. Therefore, if the refinancing will buy out separate property, then you will need to create a second real estate property to reduce the marital property balance and increase the separate property balance. In that second real estate property, which you may describe as “Refinancing Offset,” you would […]
What if one spouse has contributed to the down payment?
Suppose Party A made an initial down payment of $70,000, and the home is about to be sold. In the sale, the parties want it to come out that Party A would take out $70,000 more than Party B. Responsibility for the mortgage, however, is being shared 50-50. What you can do is to create […]
How are real estate sale proceeds reflected in the software?
When a home is sold, the proceeds show up on the Net Worth and Summary Totals spreadsheets, but not in the Budget Report or cash flow spreadsheets. Otherwise, the large income number would distort the cash flow picture in the year of sale. Also, if there are federal taxes to be paid on the sale, […]
Should I enter a real estate investment property as Real Estate or Cash & Investment?
You may choose either one, based on the level of detail you wish to enter. If the real estate is more of a passive investment, where it is enough to enter net value and rate of return (or dollar amount of return), then Cash & Investments would be fine. Use the Real Estate screen if […]
How do I enter responsibility for the mortgage shifting from one party to the other?
Here is how to specify that Party A is taking the mortgage over from Party B after, for example, four years: 1. Set Party B as initially paying the mortgage. 2. On the “more info” screen for the mortgage, specify that Party B will make a balloon payment in the amount of the balance at […]
How can I more precisely account for the tax on sale of real estate?
The Sale of Real Estate Report shows an estimated tax amount. But this is only a rough estimate, made by applying a marginal capital gains tax rate to the taxable gain. It will not reflect a situation where the gain causes a change in tax bracket, or the impact of the alternative minimum tax, or […]
How do I enter rent for a party who is paying rent?
You can enter it where you enter expenses. There will be a Real Estate section, and you will see a button to enter “Tenant expenses.”
Can a party who does not live in the marital residence claim the mortgage deduction for it?
In general, a party must live in a residence in order to claim the mortgage deduction for it. For more information, see IRS publications 504 and 936. In Publication 936, search for the definition of “qualified home.” An exception may apply if the title is in joint names and the payer is obligated to pay […]