Capital Gains?

cmgest85 — Tue, 24 Feb 2026 07:36:37 GMT

Hi! I'm trying to figure out if I'm going to have to pay taxes on the recent sale of my home. The details are:

Purchased at $365k
Lived there 15months
Sold for $385k
Sold due to getting divorced (sold house in March. Divorce finalized July)
We made several home improvements, but I don't have all the receipts.

What will I be taxed on?

Thank You!

Re: Capital Gains?

NateTheGrEAt — Wed, 25 Oct 2023 17:53:59 GMT

Hi @cmgest85 and thanks for writing in today.

From what you've described it sounds like you would not have a taxable gain on the sale.

First, you need to subtract costs of sale from your selling price when determining if you have a gain at all. You sold for 385k, and I am thinking that it's possible you paid a real estate commission and closing costs. If 385k minus all of those costs is less than your purchase price (365k), then you don't have a gain at all and there would be no tax due.

Second, even if you didn't have any closing costs (let's say you didn't hire a real estate agent and the buyer paid all the costs), your gain of 20k would be less than your prorated exemption. As described in IRS Publication 523 (see this link for the relevant section) because you sold due to "unforeseen circumstances" (namely, a divorce) you could take a pro-rated amount of the $250,000 exemption that you are allowed when you live there for 24 months. Since you lived there for over a year you'd be entitled to more than half the exemption, which is well above the amount of gain you could have possibly had.

I know from personal experience that moving on after a divorce takes time and work, and I wish you the best in that. At least it appears you will not have to worry about paying taxes on the sale of the house, based on the facts you've provided.

Have a great day!

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Capital Gains?

Re: Capital Gains?