The Arizona Court of Appeals, Division 1, has affirmed a trial court’s order that no cost of sale deduction should be taken on a residence awarded to one party, unless a sale is imminent and evidence of the cost of sale is introduced.
In Kohler v. Kohler (August 18, 2005), the Court found that under these circumstances, where Husband wanted to be awarded the house and buy out wife’s equity, and Husband had no immediate plans to sell, the trial court’s refusal to deduct a potential cost of some future sale of the property was correct.
The Kohler decision can be found at http://www.cofad1.state.az.us/opinionfiles/CV/CV040377.pdf
On a different issue, the Kohler decision also re-affirms Kelly v. Kelly, 198 Ariz. 307, 9 P.3d 1046 (2000). Because Husband participated in the Arizona Public Safety Personnel Retirement System during the marriage, and because these contributions were at least in part in lieu of Social Security payments, Husband is entitled to a Kelly analysis of what amounts he would have paid into the Social Security system during the marriage. According to Kelly, the present value of that amount should be awarded to him as his separate property (because Social Security benefits are separate property).
