Matrimonial home / income property

[Marcus]

Hi All,

Does anyone know how to treat a mixed matrimonial home/ income property? In my case, I brought a house (mostly paid for) into the marriage. The house has always been divided into 3 units. I rented out 2 units, and lived in the 3rd. When I married, my wife moved into my unit. My first question is: is the whole house, or just my 1/3 of the house treated as matrimonial home? Can I deduct the other 2/3 on date of marriage? My second question gets more confusing: after 2 years, we changed units within the house. If the matrimonial home is only the 1/3 we occupied, then we no longer lived in the same home on date of separation. Can I now deduct the whole house? Does anyone know of relevant cases to refer to?

thanks,
Marcus

[Rioe]

I am not really sure, and I can see this going one of two ways:

You get to 'write-off" the two rental apartments as not being part of the matrimonial home. The one you consider the matrimonial home is the one you lived in on the date of separation. You wouldn't get to deduct the whole house. I'm thinking it wouldn't be evenly 1/3 either, it would probably be the percentage of the total square footage. This would be like if the two rental units were separate properties.

Or, it's the whole house, similar to a scenario if you had rented out a room or two in a single family dwelling.

I hope someone can come up with some case law for you, but I do know your ex is going to come out of it with some share of the matrimonial home somehow.

[billm]

Interesting question.

Taking things to extremes sometimes helps the thinking process. What if you owned a 20 unit apartment, and did the same. Would she get the whole complex - nope.

Not sure this is reasonable thinking but it may help perspective.