Tax implications of buying house from spouse @ 1 year in

[Toby Thompson]

Hey BP,

My wife and I are married and file jointly for taxes. Our primary residence is only in her name with the rentals in my name. I want to "refi" my current primary residence to a VA cash out at 100% LTV. I spoke with one lender who is having trouble with it right now and suggested that I "buy" the home from my spouse as a workaround on the refi and to get the house in my name (ideal, but we could also do a joint if needed).

My question is- if I can't find a way to do the 100% ltv cash out refi and have to "buy" the home from my wife, what are the tax implications? I have owned the home for less than two years and I am concerned about short term capital gains tax. Any workarounds or helpful tips or lenders working on 100% LTV VA cash out refi's?

Thank you all in advance!

-Toby

[Lance Lvovsky]

Why buy the home when you can be added to the deed? You are married so no gift tax.

The tax code exclusion on gain on sale of primary residence is a two prong test. Ownership and use test. Ownership test clearly states deed can be only in one of the spouse's names if that is a concern.

Sounds like you may need a more sophisticated lender.