If the house was owned and lived in as a primary residence for at least 2 of the past 5 years the owner can take an exemption for up to $250,000 of the capital gain (If filing single, which i assume your fiance is) when selling.
That means the capital gain is calculated as selling price less selling expenses such as brokerage commissions, minus original cost. The original cost is increased by any costs for improvements while the property was owned. Take note that no mortgage payoffs are considered here. In other words, the net proceeds can reflect things like mortgage payoffs, that are not considered at all in calculating gain or loss. If any depreciation has been taken for any part of the property, that depreciation must be subtracted from the cost basis and is taxable. Any gain over$250,000 is taxable.
This may sound complicated but it's pretty simple to enter in the progrsm under sale of Home. The questions will lead you through.
The PTS appears to be a form related to taking a property tax credit and not to selling the house. It looks like, for this credit, part of the property tax paid at closing or for the year would be used by the buyer for purposes of this credit, and not the seller. Just answer the property tax credit questions in the state program.
