I have a bit of a tricky situation.
I was a part owner (40%) who bought a house in June 2015 for $1.07M. We added an in-law unit (~$60K) on the ground floor which we rented out starting August 2015 while we lived on the upper floor ourselves. We sold the house in June 2018 for $1.5M.
Question 1) It appears that up to $250K in profits can be excluded if this was my primary residence for 2 out of the previous 5 years, which it was. The part I'm unsure about is whether renting out part of the house negates this tax break? Also, because I was a part owner, does that mean I'm only obligated to 40% of the $250,000 tax break?
Question 2) This one is a bit off topic and long-winded. I'm really unsure how the other owners reported the sale of the house on their end - it was an ugly mess hence why we had to sell the house. I have lost contact with them since. I'm not a tax expert by any means, but when filing my taxes, is it safe to assume that I should file it according to my ownership percentage (40%), or if I should input the total amounts (100%). I'm afraid we will get flagged for double counting. For instance, there was a section asking how much we paid for in property taxes. The total was $7,964. I was responsible for 40% of it, so $3,185.60. When inputting into the Turbotax software, do I put $7964 or $3185.60? There was a separate section that asked about ownership percentage, to which I put 40%. I'm unsure if I should put the full amounts of everything such as rental income, property tax, etc, and the software will automatically account for my 40% ownership?
