Is a home buyout between unmarried partners taxable?

Forum|Forum|7 years ago
June 6, 2019
1 reply
23 views

I have owned a home for two years with my partner. I moved out and he is choosing to stay in the home. He will be refinancing to remove my name from the mortgage and my name will also be removed from the deed. He will be paying me the amount I contributed to the home's equity as a buyout. I know for married people divorcing, this transfer is not considered taxable. Is it taxable for unmarried individuals? Thank you.

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DavidD66

Level 15

It is a potentially taxable transaction; however, if you lived there for any 24 out of the last 60 months, then you are eligible to exclude the gain. TO EXCLUDE GAIN ON THE DISPOSITION OF A HOME from income under IRC section 121, a taxpayer must own and occupy the property as a principal residence for two of the five years immediately before the sale. ... The law permits a maximum gain exclusion of $250,000 ($500,000 for certain married taxpayers).

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