Divorce and rentals, options?

[Dennis Chiem]

Hey BP! My name is on the mortgage but both of ours is on title, of two rental properties. She doesn't want to split them (I keep one, she keeps one).  Neither of us want to sell them.  She likely won't qualify for a mortgage.  Any ideas?  We're in California.  Thank you! 

[Eamonn McElroy]

I assume you'd like to be off the mortgage of any house you no longer own, so she either qualifies with or without a co-signer, uses her share of liquid cash to pay off the mortgage (if applicable), or one or both of the properties are sold.

This is where your divorce attorney and tax advisor come in.  Everything is open to negotiation, and everything has a tax ramification.  California adds a wrinkle as it is a community property state.

Your tax advisor should be advising you regarding the tax ramifications of potential actions and interfacing with your attorney, and your wife's independent counsel should be doing the same for her.

Even something as simple as filing status (MFJ vs MFS) has ramifications that extend beyond the finalization of the divorce...

Best of luck.