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determined by the decree of divorce. [Citations
omitted.]
Mich. Stat. Ann. sec. 25.132 (Law. Co-op. 1992). On August 22,
1978, petitioner and his wife purchased the marital home and held
it as tenants by the entirety up to the time of their divorce.
Under the Michigan statute, unless the divorce decree provided
otherwise, upon their divorce they became tenants in common.
The property settlement attached to the divorce decree
ordered that the house be sold, an escrow fund be established,
the ex-wife be responsible for paying the taxes out of the escrow
fund, and the balance be split 75/25 between the spouses.
Although the decree directed the distribution of the proceeds
from the sale of the house, it did not change the ownership of
the property. At the time of the sale, petitioner owned 50
percent of the property. As a result, he is responsible for 50
percent of the tax from its disposition.
Petitioner argues that since his ex-wife received the
proceeds of sale, she is liable for the entire capital gain. We
hold otherwise. In the first place, the wife did not receive the
proceeds of sale. The sale price was $280,000, and the great
bulk thereof was used to discharge debts of both husband and
wife. Indeed, there was an insufficient amount to discharge all
the tax liabilities for years preceding the sale. Moreover,
$54,000 was set aside in escrow to pay the tax on the gain on
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