Court: Feds Can Seize Half of House

Since the government isn't a tax paying entity, I don't think it makes a whole lot of difference. That said, it's probably market value on the date of forfeiture.

Only to the extent they would be subject to tax on the value of anything forfeited. If they were subject to tax, they'd probably have to claim ordinary income in the value of what they forfeited on the date of forfeiture. If it were later sold, they would have a taxable, possibly capital gain in the amount of any increase in value after that date.

She'd get the whole exemption, but on only her half of the house. One issue is whether, upon forfeiture, the husband has any taxable capital gain. I suspect he might.

I think the federal government is exempt, though I'm not sure. Assuming they are, the wife is likely only liable for half the property tax.

Depends on what they do. If it could be considered a public or private nuisance, they could be sued to have it abated. But whenever there are two owners of property, one has the right to have the place sold and the proceeds split. So I don't think it's a real issue.

There's an answer for every question. They may not be right, but they are certainly there. Stu

Why? He "sold" the house for $0.

If the government said "You owe a fine of $125,000 so we're taking your share of the house for that much" I could see that as equivalent to a sale at that price. But when it says "We're taking your share of the house" there's no such "sale". Seth

In effect he paid a fine in the amount of the value of the house.

It's the same thing.

Stu