Is it legal to sell my house to your spouse?

The quick answer to this question is yes, it is legal to sell your home to your own spouse. Usually in a divorce, the court will direct one party to buy out the other party.

That being said, there are a few things to keep in mind before selling your house to any family member.

Find out if the sale is likely to result in a large tax bill.

The laws for selling a house to a spouse vary from state to state and may also vary depending on whose name is on the mortgage. He recommends talking to a local real estate attorney to find out what the laws are in your state.

Also check to see if both spouses are on the mortgage. If they are, lenders will usually insist that both spouses stay on title.

Rather than selling the house to your spouse, a better solution may be to transfer the property for free.

The unlimited marital deduction allows U.S. citizens to give money or property to their spouse (who must also be a U.S. citizen) without incurring federal or state gift taxes.