A capital gain is Proceeds minus Selling Costs minus Basis.
The Basis in the property is the original purchase price plus improvements (for example, a deck was added that cost $10,000).
The amount of the mortgage is some indication of what the Basis of the property is but is not dispositive.
Was there a Form 1099-S issued in connection with the sale? Did that form allocate the proceeds between each of you?
Do you have an agreement as to allocation of sale Proceeds?
If you both own a 50% undivided interest as evidenced by the deed in the land records, then the presumption will be 50% of Proceeds minus 50% of Basis will be the gain.
If you have lived in the home 2 of the last 5 years, then you can exclude the first $250,000 of the gain.
