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Do courts allow setoffs or credits when the marital home is sold?

Over the course of a marriage, Florida residents frequently accumulate a number of different items of personal and real property. As discussed recently in this blog, the manner in which this property is divided in a divorce often turns on the character of the property, and whether it is marital property owned by both spouses or non-marital property belonging to just one spouse.

While significant disputes can arise as to whether a particular asset is marital or non-marital property, the resolution of that issue does not completely end the debate. The marital property must be divided equitably among the spouses, and disputes can arise as to how certain property should be divided.

In many marriages, the most valuable property interest owned by the couple is real estate. Specifically, the marital home is frequently a high-value asset, which can lead to disputes over how that asset is valued and divided.

For instance, a party may believe the person is entitled to a setoff or credit for the sale of the marital home. Under Florida law, a party is not entitled to credits or setoffs on the sale of the marital home unless the settlement agreement or final judgment specifically provides that such credits or setoffs are allowed.

Courts consider a number of factors in making this determination, including whether the exclusive use and possession of the home is being awarded, whether alimony and child support are awarded to the party in possession of the home and what the value is to the party in possession of the use of the home. The court also must consider other factors like which party is entitled to claim mortgage interest payments and tax payments as tax deductions, and whether a party will experience a capital gains taxable event by selling the home. Accordingly, there are a broad range of factors the court will examine to determine whether credits or setoffs are allowed.

Source: Florida Legislature, "61.077 Determination of entitlement to setoffs or credits upon sale of marital home," accessed on June 4, 2016

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