It depends but if you have to report the sale, you will report your share of the house (50/50 if you live in a Community Property State) as the sale of a capital asset. So you will include your share of the cost basis and your share of the net profits from the sale on your tax return (if this is not your primary home or you do not meet the home gain exclusions).
You do not need to enter or report the sale of your primary residence if:
- You never used your primary residence as a rental or took home office deduction
- You have a loss on the sale of your home (Personal capital losses are not reported on your tax return)
- You did not receive a Form 1099-S and
- You meet the home gain exclusion (see below)
You can take the gain exclusion as long as you considered the home your "primary residence" for 2 of the last 5 years. If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income. You may qualify to exclude up to $500,000 of that gain if you file a joint return with your spouse. See Sale of Your Home for more information on the exclusion.
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