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A taxpayer inquired how to calculate capital gains and the reinvestment exemption for a property acquired before marriage and paid for using community property funds. The DGT ruled that ownership is held as a tenancy in common based on individual contributions, and each spouse must apply the exemption to their respective proportional share.
This ruling clarifies how capital gains tax and reinvestment exemptions are applied in properties held under the community property regime, emphasizing that ownership shares are determined by the actual financial contribution of each spouse rather than equal division.
The tax team reviews your specific situation.
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