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Reese Witherspoon and Ryan Phillippe realize gain on sale

Georgia movie fans may follow their favorite actors like Reese Witherspoon and Ryan Phillippe who, in spite of divorcing seven years ago, only recently sold a California home that they jointly owned. They bought the four-bedroom, four-bath duplex for more than $1.17 million in October 2005 and sold it on Jan. 17 for $45,000 more than the asking price of $1.39 million, gaining a net profit of $266,500.

Witherspoon and Phillippe both lost a large amount of money on real estate deals in recent years, but the more recent gain may help offset those losses. He previously owned a Zen-inspired mansion on the Sunset Strip, but he lost more than $1 million when he sold it in March 2013. Witherspoon lost more than $800,000 when she sold her ranch in Ojai, California. Reports speculate that due to the actors' income, they can afford such losses.

When a couple divorces, part of the process includes separation of individual assets from marital assets. Each individual walks away with his or her individual property, and the marital property is divided according to the laws of the state. It may be that Witherspoon and Phillippe's jointly owned residence was included in the couple's marital property.

If a couple in Georgia agrees that they want to delay the sale of marital real estate in hopes of each of them benefiting from an improved market, the agreement might need to be documented in the divorce paperwork. An attorney may be able to assure that the documents are drawn up to meet both the intentions of the couple and the requirements of the state. Sometimes, the parties and their attorneys can negotiate a divorce settlement. At other times, a contested divorce goes to trial, and the attorneys could advocate for each of the parties in front of a judge.

Source: Forbes, "7 Years After Divorcing, Reese Witherspoon And Ryan Phillippe Sell Shared Los Angeles Investment Property", February 07, 2014

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