divorce appraisal fees

Technical topics regarding tax preparation.
#1
JAD  
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California
I am aware of the ability to capitalize legal fees incurred in a divorce when those fees specifically relate to securing title to the real property. Does the same apply to the appraisal costs? I have not found any authority or discussion on this. The best I found was Woodward, 397 US 572, which relates to the treatment of costs incurred when majority shareholders had to purchase a minority shareholder's stock. I can make analogies from this case, but it's not ideal.

Thanks for any help.
 

#2
lucyko  
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933
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27-Jul-2014 10:19pm
Location:
Orange County,CA
My opinion is that appraisal fees related to a divorce property settlement would be considered a personal non-deductible item. My instincts tell me that a home appraisal occurs when you are attempting to determine the home value for purposes of a divorce property settlement . An appraisal occurs when one party wants to keep the house so it's necessary to obtain an independent appraisal of the value to properly split the value particularly in California where community property laws exist .

I don't think the appraisal fee of $350 -$500 adds value to the basis of the home for section 121 purposes.

Others may disagree .
 


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