Jewish World Review Nov. 8, 1999 /27 Mar-Cheshvan, 5760
Real life is tough luck
DEAR BRUCE: My wife was married for six years prior to our marriage. At the divorce, her ex-husband, who was never financially responsible, was directed by the divorce court to pay for an open Visa account, since he had made all the charges during their marriage and separation. She, in turn, was ordered to retire some other obligations, which she has done. Her ex-husband has never paid a nickel on the Visa, and now it shows up as an unpaid bill on her credit account. This precludes me from using her on an application for a home. She did what she was supposed to do, and he didn't -- and now she's being penalized. What gives? -- S.R. Pomona, Calif.
DEAR S.R.: Welcome to the real world. The fact that the judge ordered him to pay has nothing to do with the creditor's obligations. I am sure that your wife feels that she did what she was supposed to do and expects the credit-card issuer to look to her ex-husband. If he doesn't have any money and the debt was incurred during their marriage, they are jointly responsible. She may be able to negotiate a lower payment, or she could go back to the court and have the court consider contempt charges against her ex-husband, but that is not going to get any money out of him.
DEAR BRUCE: I have inherited several income properties. My mother and dad lived on the income from these properties for many years. I am a busy professional and have no interest in the properties. My husband keeps insisting that we should keep them because there will be huge tax considerations in the event that we sell them. What do you think? -- N.D. Kokomo, Ind.
DEAR N.D.: You have not given me enough information. For example, if the properties are still inside your parents' estate, it may be to your advantage to leave them there for a time, or liquidate them prior to their being transferred to you. I think you are using good judgment -- running multiple buildings is a business, and it requires time and attention. If you are stretched out now, I don't see much purpose in trying to do this yourself. If the holdings are big enough, a professional management team can be engaged. On balance it seems to me that you would be better off taking the money, investing it in a more passive fashion and getting on with your life.
DEAR BRUCE: I purchased a home in April of this year. We bought it at a very good price and know that we will make a profit when we sell it. My husband was recently offered a position several hundred miles from here, which necessitates selling this home. We really don't need the money we will make on this home, but we would like to use it for cleaning up a few bills and things of that sort. We don't plan to buy another home for some time in our new locale. Since this profit will be made on our principal residence, must we pay taxes? -- T.M., Albany, N.Y.
DEAR T.M.: You sure do. The exclusion requires that you must have occupied the home for two of the last five years. A home purchased in April and sold now fails that test. Further, since you have had the home less than a year, any money you realize from the sale of this home will be taxed at ordinary rates, in contrast to capital
Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).
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