Few questions:
#1: we are not married ( engaged ) the proceeds of the home are going to be less then $250,000, so no taxes correct?
There will be taxes. As rental property (assuming not personal use) you should have been taking depreciation. The recapture of depreciation on sale is recaptured as section 1250 income and comes before the home sale exclusion is applied. If you did not take depreciation, seek professional help.
#2: Since we have lived in the home for over 24 months in the last 5 years, we can still use this rule even though the house was a rental for 1.5 years?
yes but see above about depreciation recapture.
#3: I am assuming we have to file or submit something for the proceeds, how does that work? Do we both split the cash on our form?
you have to decide on your relative ownership %s. then each of you would report the sale using the Turbotax home sale worksheet.
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