Expert: Dick Dennis - 7/12/2006

Question
Mr. Dennis,

My wife is considering purchasing a home in Ohio. She wants to go through the process on her own. Her loans, her name on everything. The loan officer that she spoke with told her that there was no problem putting the loans in her name only, however he said that the title insurance/title had to be in both our names. Do to work obligations, we live at seperate residence. this is the main reason behind the whole process. Any input would be greatly appreciated.

Thank You,
Tim

Answer
First thing you have to look at, Tim, is IRC 121 in which you may exclude up to $250,000 in capital gains upon SELLING your house(s) if you have lived in your principal residence in two of the five years prior to selling the property (or $500,000 if you both file your taxes jointly).

However, since you will be living in separate principal residences, the $250,000 exclusionary will take effect should you ever sell your respective residences.

Unless Ohio is different (I recommend you consult a REAL ESTATE attorney) your wife may own her property "as a married woman owning the property as her separate property." Another reason to consult a REAL ESTATE attorney, is to make sure you will not be responsible for your wife's mortgage should she ever, for whatever reason, stop making her payments.

I do wish you well.

Dick Dennis             dixiedee13@aol.com