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"One of the issues Peter and I will have to address in the divorce process is the ownership of the familial home. I&amp;#039;m residing in it with the kids and paying the mortgage, but his name is still on the property and will have to be for a long, long time. We had previoulsy refinanced our home at the top of the market, taking advantage of the large amount of equity we had to pay off the rest of our small business loan after our home business went under. Not ideal, but it had to be done.  Shortly after the refinance the housing market went boom and not long after that, we started talking about splitting up. Our mortgage is now underwater by at least $25k and it&amp;#039;s not going to get paid down anytime soon unless I win the lottery. We can&amp;#039;t get a refinance with the home unable to appraise at the value of the loan, and we don&amp;#039;t qualify for a lot of the HARP programs because our credit is far from stellar. It turns out, we need to be careful how we write our co-ownership into the divorce, according to this piece featured on MarketWatch.com. From the article:  The person who will be the non-resident ex should insist that the divorce papers stipulate that, as a condition of the divorce agreement, the other ex-spouse can continue to occupy the home for as long as he or she wants, or until the kids reach a certain age, or for a specified number of years, or whatever the divorcing couple agrees on. Once the magic date is reached, the home can either be put up for sale with the proceeds split according to the divorce agreement, or one ex can buy out the other&amp;#039;s share for current market value at that time. This language in the divorce papers allows the non-resident ex to receive &amp;quot;credit&amp;quot; for the other ex&amp;#039;s continued use of the property as a principal residence. So when the home is finally sold, the non-resident ex will still pass the two-out-of-five-years use test [as required by the IRS] and thereby qualify for the $250,000 gain exclusion privilege.   I hadn&amp;#039;t even thought about the tax implications of the eventual sale. This is why you need to make sure you&amp;#039;ve got everything written in and a lawyer or mediator who asks all the right questions. This would have gone right by me, and having this written into the divorce helps make a stronger case for the kids and I staying in the house, especially if it could benefit Peter financially someday. The more you know.... Did you (or do you currently) co-own your home with your ex? How did you work it out? [Follow Ellie on Twitter and Facebook] "^^<http://www.w3.org/2001/XMLSchema#string>
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