I will assume you are not on the loan of your fiance's house. Therefore, this will only affect his credit. If this was his principal residence, he probably will not have to pay any taxes on the short-sale and resulting income from debt relief on the property. I just cannot say so with certainty without more facts.
Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.
View my complete profile
The house you bought is your separate property and will not show up on his credit or IRS returns as long as it stays separate and you file separate.
Similarly his credit will not impact yours as long as you do not open joint accounts. If his short sale was done properly there should be no tax consequences to him and no liability for any deficiency.
Have you and he discussed ownership of the house you bought in April? Even if you never put it in his name, payments made for mortgage, repairs, insurance, taxes, etc. will give him an interest in the house if those payments are made with community funds.
Think about a prenup if you want house to remain separate.
The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of California. Responses are based solely on California law unless stated otherwise.
I agree with the prior posts - the short sale should only impact your future husband's credit, and I would definitely consider a premarital agreement so as to protect the house you previously purchased.
NOTE: If you find this response helpful, please click on the “thumbs up” button at the bottom.
DISCLAIMER: THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. THIS POSTING DOES NOT CREATE ANY ATTORNEY-CLIENT RELATIONSHIP BETWEEN US. FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT A QUALIFIED ATTORNEY.
First of all and most importantly, setting aside any credit issues, will your fiance owe tax. There are a number of ways to eliminate the tax, you and your fiancee need to determine whether he owes tax and if so, whether he has the ability to pay it. If he doesn't, and you do NOT get a pre-nuptial agreement, then the IRS can go after your share of community property to collect his tax debt in California. You really should consult a tax practitioner to ensure that you are both aware of all the consequences aside from the adverse credit issues.
This should not be relied upon as legal advice and you are advise to seek your own attorney to obtain said advice. You cannot rely upon this to avoid any penalties asserted in any tax audit.
Divorce Divorce and joint accounts Dividing debts in a divorce Community property in divorce Divorce and bankruptcy Prenups and divorce Bankruptcy Joint accounts during bankruptcy Credit Debt Debt relief Bankruptcy and debt Real estate finances Short sales Real estate and bankruptcy Real estate Prenuptial agreement Tax law
Get our best tips and attorney advice in our 3-part prenup email series.