@jahol wrote:
Thank you very much. I "credited" him the $180,000 he put down as a down payment as part of our splitting up since it wasn't my money to begin with, so he received a check for the $180,000 plus his $85,000 in "net" proceeds after the mortgage and realtor was paid, so his check was $265,000 to my $85,000. But I'll report this and not worry based on your answer. Thank you again!
The IRS will assume you owned the home 50/50 unless you have something in writing. If you did not contribute to the downpayment, but you did contribute to the monthly payments, you owned some percentage of the home, but without an agreement in writing it will be very difficult to prove what percentage you owned.
Even if owned the home 99% and is responsible for 99% of the the capital gains, his capital gains would be less than his $250,000 exclusion, so the IRS can't even accuse him of avoiding taxes by assigning the wrong ownership percentage. So there's no harm and no tax owed to either of you whether you report the ownership as 50/50 or something else. But as I said, without some kind of written agreement, it would be very difficult to prove the ownership was not 50/50.
