I live in MA. My first wife and I divorced in 2017; we both kept half-ownership of our house and she lived in it with our teenagers. She sold the house in 2022; we split the proceeds, which were substantial but which in total were under $250K.
As I read IRIS Publication 523, I can exclude my income from this sale (which was less than $100K) from my taxable income. I refer in particular to this passage:
"Separated or divorced taxpayers.
If you were separated or divorced prior to the sale of the home, you can treat the home as your residence if:
You are a sole or joint owner, and
Your spouse or former spouse is allowed to live in the home under a divorce or separation agreement and uses the home as his or her main home."
I am using the desktop product TurboTax 2022 Premier. I cannot seem to get Premier to agree this income is not taxable. How do I do so? Should I just put down the home as my primary residence without any other explanation? That seems fraught with peril.
