@mom42 wrote:
We are going through a divorce in a community property state. Our decree is being crafted to say that we will "file separate state and federal taxes for the tax year 2020 with no theory of community property. Can we split the capital gain and take that separately?
One other point. I'm not a lawyer but I don't see how you can be divorcing in a community property state but will file taxes with "no theory of community property." Without going into more details about which I am not an expert, I will suggest that you ask that the divorce agreement specify that the capital gains from sale of the home be split 50/50 (or whatever other way is agreeable.)
From the IRS point of view, each ex-spouse is entitled to use the exclusion on their share of the gain. Actually deciding what your share is should be put in writing.
