Posted on: 21st Mar, 2008 07:44 pm
i don't see why the purchase price forms the basis of the community interest. say for example the purchase price is 400,000 and the home is worth 800,000 on the date of marriage. if the original owner decides to pull 400,000 in equity out of the home, then what is the purchase price now? let's say the community pays down 500,000 in loans. now the community percentage goes to 500,000/400,000. which, of course, is greater than 100%. which tells me that the community percentage should be somehow based on the value of the home on the day of marriage. or else, the purchase price should be changed when a refinance occurs. how does the calculation work in such scenarios?
Hi dave,
I understand your point but when it comes to calculating the community property percentage, the purchase price is taken as the basis. This is so because the community interest reflects the contribution of the husband and wife towards the purchase price of the house (the loan is taken to buy the house)
To know how the community property interest is determined, refer to the calculation done in a previous discussion.
Thanks.
I understand your point but when it comes to calculating the community property percentage, the purchase price is taken as the basis. This is so because the community interest reflects the contribution of the husband and wife towards the purchase price of the house (the loan is taken to buy the house)
To know how the community property interest is determined, refer to the calculation done in a previous discussion.
Thanks.