Divorced spouses can still both claim §121 use/ownership tests via §121(d)(3) tacking — up to $500K exclusion preserved.
IRC §121(d)(3) allows a divorced spouse who is granted use of the marital home (even without ownership) to have the other spouse's use tacked to theirs for the 2-out-of-5 test. Additionally, an ex-spouse who transfers a home under §1041 gets to tack the transferor's ownership period. Result: both spouses can preserve their $250K exclusion even after divorce timing that would otherwise disqualify one.
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A Qualified Domestic Relations Order splits qualified plans between spouses with no 10% penalty and no tax.
Three flavors of §6015 relief remove joint liability for a spouse's understated tax, deficiency, or unpaid balance.
Grantor trust for the benefit of an ex-spouse shifts income taxation to the lower-bracket recipient post-TCJA.
A properly-drafted marital agreement locks down separate ownership of pre-marital and gift/inherited assets.
In the year of separation, MFS can beat MFJ when incomes are lopsided, deductions are personal, or spouse is untrustworthy.
§408(d)(6) IRA transfers and §223(f)(7) HSA transfers pursuant to divorce decree are tax-free — no rollover rules apply.
Property transfers between spouses (or ex-spouses within 1 yr / incident to divorce within 6 yrs) are tax-free.
With alimony non-deductible post-2018, restructure as property transfers, HSA/IRA splits, and unallocated support.