How Long Until You Tell The Truth?

[SlowwHand]

A guy at the VFW has been married for a little over a year. He was nearing 50 and had never been married. Has a house that's not that many years from being paid off.
Everybody said, amongst themselves, that he was screwing up, BIG TIME. I told him that he was. My opinion wasn't solicited, but I like him well enough that I told him.
Time passes, and he's getting full bore of Donnapotamus. He'd been thinking about selling his house (before community property with this slag) and buying another house.
This time, he asked me what I thought. I told him, it doesn't matter what I think, he knows how it is for him. He insisted on my opinion, so I gave it to him.
I told him he was an utter fool to marry her. That he would be a bigger fool to sell HIS house and buy another for them. I told him I wouldn't leave food outside to attract her in anyway.
She doesn't cook at all. She doesn't clean at all. Now her daughter, daughter's boyfriend and newish grandchild are in the house. None do anything.
She's a fatass ***** with a piss-poor attitude.

As you can see, I told the truth from the beginning. He knows it. He asks, "Why didn't anyone but Sloww tell me? Why didn't anyone validate it?
They all say, it wasn't their business to butt in.

So, when do you "butt in"?

[Dinner]

You tell them once and if they go ahead then it is their business.

[SlowwHand]

It's over a year after he did it, and he's still in some kind of shock. He still has to ask. I'm a pretty honest guy. You ask me, you better be ready to hear it.


Tonight, she came into the VFW with Arby's. He took a fry and she raised total hell. She had asked him beforehand if he wanted anything.
He looked at me. He knows. I was the one that was, and is, honest with him. I'd cut her loose so fast she'd get dizzy from the fall.

[MichaeltheGreat]

Most com prop states have a basis carryover - it's an artifact of longstanding capital gains rules. e.g. house was his sole property, all appreciation in value is his sole property to the date of marriage, then any appreciation in value is com property (this depends on the type of asset and state, but the worst rule is that the post-marriage appreciation is com property). When he sells the house and wants to buy another, then capital gains rules come into play. His basis for capital gains and hers are distinct - he has a sole liability for capital gains tax on his portion of the capital gain, then there's joint liability on the community portion. If he sells the house in his name, he can buy in his name, and the separate and community portions from the old house carry over. BUT, since they're married, she does share in any appreciation of value going forward. The basic thing is that his sole property asset isn't extinguished, it just doesn't grow.

With all these barnacles attaching to his hull, he should run like hell, though.

[SlowwHand]

Exactly. Rent the house? Fine. Kick her to the curb? Optimal.
They won't even load the dishwasher. They leave it all in the sink. Laundry? Har dee har har.

[MichaeltheGreat]

Yep. Time to careen the boat and scrape the hull clean.

[Dinner]

A the very least get the useless boyfriend and daughter out of the house. They want to shack up then fine but they can make their own way in the world.

[SlowwHand]

Here's the worst part. His step-daughter knows her mother is unreasonable. She's a decent woman. She is otherwise active and has plans to go, with or maybe without the child's father. About 30 or so. Works as a server at a better than decent place, but is enrolling in college. My friend is very loving with the grandchild, and thinks well of the step daughter. The grandchild is after the fact.

[Ben Kenobi]

So, when do you "butt in"?

Depends on whether I like the person.

[Kidlicious]

Here's the worst part. His step-daughter knows her mother is unreasonable. She's a decent woman. She is otherwise active and has plans to go, with or maybe without the child's father. About 30 or so. Works as a server at a better than decent place, but is enrolling in college. My friend is very loving with the grandchild, and thinks well of the step daughter. The grandchild is after the fact.

Oh, so he's getting attached to her family? Another bad move. He should cut her off clean.

[Alexander's Horse]

Taking on a relationship at that age is a big deal. Mrs Horse and I looking at setting up a family trust to preserve assets in case something happens to us. We have both had health scares in recent years.

[SlowwHand]

He's attached to the baby, and at least respects the daughter. His wife is a pure *****.

[BlackCat]

Divorce the ***** an marry the daughter seems like the logical solution.

[BlackCat]

Most com prop states have a basis carryover - it's an artifact of longstanding capital gains rules. e.g. house was his sole property, all appreciation in value is his sole property to the date of marriage, then any appreciation in value is com property (this depends on the type of asset and state, but the worst rule is that the post-marriage appreciation is com property). When he sells the house and wants to buy another, then capital gains rules come into play. His basis for capital gains and hers are distinct - he has a sole liability for capital gains tax on his portion of the capital gain, then there's joint liability on the community portion. If he sells the house in his name, he can buy in his name, and the separate and community portions from the old house carry over. BUT, since they're married, she does share in any appreciation of value going forward. The basic thing is that his sole property asset isn't extinguished, it just doesn't grow.

With all these barnacles attaching to his hull, he should run like hell, though.

I'm pretty sure that I must have misunderstood this. I read it as you have to pay taxes on value increase of home property, but that sounds kind of insane ?

[MichaeltheGreat]

You have to pay taxes on value increases if/when you sell, subject to a bunch of rules, limitations and exclusions. An accountant's or tax pro's wet dream, a home seller's pain in the ass.

It gets more complex when you have marriages, divorces, timing of home improvement expenditures, etc. and can become a very complex issue.

Whether you have to pay taxes after a given sale or not (purchase of a new house can defer the tax liability) there's potentially all sorts of accounting issues when it starts as separate property, then you get married in a community property state. Ideally, you should have an appraisal at time of marriage and comparable market data, then keep meticulous records of maintenance expenses, etc. Or handle it in a pre-nup, so you don't get skinned down the road like Sloww's buddy is likely to do.