Before we were married, my wife owned a house in New York State that was used as a rental property. It was minimally maintained and she took her depreciations on it for a number of years until the base value was down to almost nothing. While we were living together in another house that she owned, but before we were married, I started doing some major renovations on the rental house. We then rented it out again for the summer, but after selling the house we had been living in, we decided to use the rental house as our primary residence. Then we got married, and I did considerably more renovation to the house – adding a new kitchen that I designed, plus a half bath, stripping old lead paint and returning to the original varnished trim, landscaping the yard – etc. In other words, turning a sow’s ear into a silk purse in preparation for selling it and moving permanently to Maine. We kept it as our primary residence for 2 years, and then we sold the house for a major gain, far above the estimated value before the renovations – in fact had we not been married, there would have been considerable capital gains tax due, well above the $250,000 maximum allowed for a single person.
Part of the sale of that house went into a joint bank account that was drawn on to pay living expenses, and to pay for the construction of the house, previously discussed, that I built here in Maine, (on the property that we bought before we were married), part went toward the purchase of another property that we bought in joint name here in Maine, and $100,000 of it went into a bank account that is in my wife’s name only. Aside from the jointly owned property, my wife believes that everything is hers, and that I am entitled to nothing for all of the improvements that I did to the properties that she had owned before we were married – whether the work was done before we were legally married or after -- nor am I entitled to anything from the sale of what we declared as our primary residence in NY, despite the fact that we took advantage of our marital status at the time of the sale to avoid paying capital gains tax. I would like to know what I might be entitled to in the event of a divorce.