Definition of "Marital deduction"

Tax deduction permitted upon the transfer of property from one spouse to another. The deduction is allowed under the federal gift tax for lifetime transfers or under the federal estate tax for transfers of a decedent.

Comments for Marital Deduction

Carolyn Mingo Carolyn Mingo said:

If an owner gets married after they bought a home, now divorcing does the other have rights to property?

Feb 05, 2020  09:53:02

 
Real Estate Agent

Hey, Carolyn! Well, it depends. It is common for couples to decide between them how they are going to the divided property. But, if they cant come to an agreement, the property dispute is taken to court. Here is where things are decided a bit differently in some states compared to others. There is the so-called, community property and equitable distribution. The community property scheme is used by courts in Alaska, Arizona, California, Idaho, Nevada, Louisiana, Texas, Mexico, Washington, Wisconsin, and Puerto Rico to settle property disputes. In these states, the property can be classified as community property or property equally owned by both spouses or it can be classified as separate property of one spouse. If the couple goes through a divorce, community property is divided equally between the spouses and each spouse gets to keep their separate property. On the other hand, courts in all the other states use a scheme called equitable distribution. This means that assets, earnings, and property accumulated during a marriage is fairly distributed between the spouses at divorce, but not necessarily equally. In some cases, judges might ask one of the spouses to use separate property to make a fair settlement. The division is not necessarily physical, but rather it refers to the value of the property, therefore one spouse might receive a percentage of the total value of the property. We have an article about divorce and real estate that talk about these things more in-depth, so you might want to check it out.

Apr 10, 2020  09:23:19
 
 
image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

The down payment on the price of a real estate. For example, it is customary to make a down payment of 10% of the value of a real estate parcel upon signing the purchase agreement. ...

Selling price for a property less assumed mortgages by the buyer. For tax purposes, the computation of the contract price is critical. ...

Bond whose interest is free of federal, state, or local tax in the state of the issuer. It is typically a municipal bond of estate or county agency. For example, a New York City resident ...

The right to demand that title be conveyed upon payment of the purchase price. ...

Charge levied against property owners to finance an improvement made by the local government which benefits the homeowners and commercial businesses. Examples are sidewalks and sewers. ...

Factor employed by real estate agents or appraisers to determine the change needed in operating income to obtain a desired rate of return. It is used to evaluate income-producing property. ...

Basis for the valuation of property acquired from a decedent for tax purposes. The unified transfer tax in 1976 provides for the valuation of property to be the adjusted basis immediately ...

Also called a will. Describes the disposition of property. ...

Stature regulating the use of credit information. Allows consumers such as prospective homeowners access to their credit files. It requires a lender to explain how loan interest is ...

Popular Real Estate Questions