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 […]
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 […]
What does the software use as the price at which a real estate property will be sold in the future?
A real estate property is sold for a price equal to the property’s value in the year of sale. The software automatically calculates this value. It does this by starting with the current value and increasing that value each year by inflation, or by another rate of appreciation if you have entered it. You enter […]
What if part of the home was rented before sale?
If the couple did not live in the rented part for 2 of the 5 years before the sale, treat the sale as if it were the sale of two properties. Enter one as a rental property, and enter the other as a personal property. Divide the value and mortgage proportionately between the two properties. […]
How do I handle depreciation recapture?
If a real estate property was rented or used for business, and then is sold, there may be depreciation recapture on the rented portion. Depreciation recapture provides that some of the gain on a sale of real estate is ordinary income. It applies if a method other than straight line was used to depreciate the […]
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 […]