Co-Owned a house in 2024 with a partner (unmarried). Separated and ownership was transferred via quitclaim to her and I was paid a sum of money. Is that money taxed?

[rdavo95]

I am not sure if this money needs to recorded in my tax filings. We were both originally on the deed and now only she is. The amount I received was less than $50,000 if that makes a difference

[Vanessa A]

Possibly.  You will need to report the sale, as all sales are to be reported.  However, it depends on your cost basis as to whether it will be taxable.  If you had a loss or did not make any profit, then it would not be taxed, but still need to be reported.  If you had a gain, then it would be taxed. 

If the house cost $100,000 and you were both paid $50,000, then you did not have a gain on the sale, so you would report your income as $50,000 and your cost basis as $50,000 so it would be a wash.  If you had a gain, if you both bought and sold the home in 2024, then this would be a short term gain and taxed as ordinary income.  

If you owned and lived in the house for 2 years or more than this would fall under the home sale exclusion. 

[Hal_Al]

Q. Is that money taxed?

A. Yes, usually.  You effectively have the sale of a capital asset. 

But, there is an exception for the sale of your principal residence.  Technically, you are allowed to exclude the the capital gain if you lived in the home for at least two of the five years prior to the transaction date. There is an exception to the two year rule for a divorce/breakup. So if you lived in the home for a least 5 months, you do not have to report the sale/transaction, for your $50K exclusion*.

If you received a form 1099-S, reply back for instructions. 

* Reply back, if your interested in the exclusion calculation.