Sale of home gain with co-ownership

[mikekeaau]

My uncle and I are unmarried co-owner on title. My uncle satisfies the two-out-of-five-year ownership and use tests. I didn't met the residence test since I lived in another state. We sold the house last year and got a capital gain of $350,000.  (The cost basis was $150,000 and sale price was $500,000). Then, my uncle bought another smaller house for $280,000 within 6 months from the gain and his savings. Should we split the sale price in half and file tax even though there is no paper agreement for the split responsibility. I assume I will pay more tax then his?

[RobertG]

Yes, you should split the sale price.

Your Uncle would receive an exclusion on his portion of the gain, $250,000 or $500,000 depending on his filing status.

You would not receive an exclusion since it is not your home.

His purchase of another home does not enter into the calculation.

[mikekeaau]

Thank you so much for the clarification Robert! I will proceed my tax filing.