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Tax implications on vacation rental after divorce

Me and my spouse purchased a vacation rental home early this year, we have worked in the house for more than 200 hrs together and the average length of stay is less than 7 days.

We were planning in report the income under schedule C and also use the accelerated depreciation.

We will divorce before the end of the year which it means that we will have to do our taxes as single instead of married but also I'm wondering how this will affect the tax on the income of the vacation rental under the following scenarios:


-If one of the spouses gets awarded the house. Does that person now has to have all the burden of proving that he/she worked in the business for more than 200hrs. alone to report under schedule C? Would it have to pay self-employment tax and/or employment tax to the spouse (ex-spouse)?

-What happens if the house is sold during the divorce and the profits (loss) are split?



2 Replies
Level 15

Tax implications on vacation rental after divorce

I highly recommend you talk to a local tax pro to get all your questions answered and do some tax planning so you are not surprised later.  Education is key especially with a divorce in the mix ... you may also have some state tax issues to consider. 

Level 15

Tax implications on vacation rental after divorce

i would also suggest yuo discuss this with your divorce attorney if you are using one.  there are disconnects between divorce law and tax law. 

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