Capital Gains Exemption

[Kalley]

I purchased and sold a home within a 1 year and 10 month span. Normally this would require I pay capital gains tax but I purchased the house with my ex husband and the reason for selling is that we got divorced. From what I've read I can file a capital gains exemption, how do I do this when using turbotax to do my own taxes. If I need to hire someone I will but would prefer to do them myself. 

[DianeW777]

It depends on the home sale exclusion rules which require you to live in the home as your main home for 24 months. See the information below and you can complete your return with TurboTax.

Key Eligibility Requirements: IRS Publication 523

1. Ownership: If you owned the home for at least 24 months (2 years) out of the last 5 years leading up to the date of sale (date of the closing), you meet the ownership requirement. For a married couple filing jointly, only one spouse has to meet the ownership requirement.
2. Use: If you owned the home and used it as your residence for at least 24 months of the previous 5 years, you meet the residence requirement. The 24 months of residence can fall anywhere within the 5-year period, and it doesn't have to be a single block of time. All that is required is a total of 24 months (730 days) of residence during the 5-year period. Unlike the ownership requirement, each spouse must meet the residence requirement individually for a married couple filing jointly to get the full exclusion.
3. Look Back Period: If you didn't sell another home during the 2-year period before the date of sale (or, if you did sell another home during this period, but didn't take an exclusion of the gain earned from it), you meet the look-back requirement. You may take the exclusion only once during a 2-year period.
4. Exceptions - May not apply to you and can be reviewed at the link above.
   1. Separated or divorced taxpayers. If you were separated or divorced prior to the sale of the home, you can treat the home as your residence if:
      1. You are a sole or joint owner, and
      2. Your spouse or former spouse is allowed to live in the home under a divorce or separation agreement and uses the home as his or her main home.

If your home was transferred to you by a spouse or ex-spouse (whether in connection with a divorce or not), you can count any time when your spouse owned the home as time when you owned it. However, you must meet the residence requirement on your own. If you owned your home prior to your marriage and after your divorce or separation, and your spouse or former spouse is not allowed to live in the home under a divorce or separation agreement, you count any time that you owned the home solely or jointly with your spouse as time when you owned it, and you must meet the residence requirement on your own.

Follow the steps in the link below and TurboTax will guide you to the correct end results, which may be a taxable gain.

• Where do I enter Form 1099-S for a home sale?