In Re Marriage of Harrington

Husband and wife dissolve their marriage. They sell their home at a profit and divide the proceeds. The capital gains taxes due from the profits are not the same for each party. Under the facts here we hold that each party alone is liable for his or her capital gains taxes.

Wife Judith W. Harrington appeals an order denying her motion that husband Ronald G. Harrington pay one-half of the capital gains taxes recognized upon her share of profits realized from the sale of the family residence. The trial court properly decided each party alone was liable for capital gains taxes due upon his or her share of the profits. We affirm.

Facts

On January 5, 1988, Judith W. Harrington brought a petition to dissolve her nearly 25-year marriage to Ronald G. Harrington. Six months later, the Harringtons sold the family residence and realized a profit of $480,000. Husband and wife divided the $480,000 profit equally. Husband, a lawyer, then used part of his proceeds to purchase wife’s community property interest in his law firm and to pay wife for her waiver of spousal support.

In court proceedings husband declared he and wife orally agreed that each of them alone would be liable for…