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davenpoc
Level 2

Divorce then sell home 2020

My husband and I divorced in TX on March 17, 2020.  Closed on our primary residence on Sept. 30, 2020.  We decided on 50/50 split on any gain on the home.  Bought for $35K in 1995, sold for $330K 2020 with about $120K in expenses to improve the home over the years.    So, since we split 50/50 and I can file as single since not married as of 12/31/2020, I added in the sale of the home and all of the expenses associated.  Turbo Tax says it will figure my husband's part later on and not to worry.  I have not yet seen this in Turbo Tax yet.  Will I be able to file my ex-husbands taxes for him via Turbo Tax and Turbo Tax will figure the capital gain correctly for both of us?  I know we will not exceed the $250K exclusion for each of us.  Just want to make sure we can get it figured correctly.

1 Best answer

Accepted Solutions
DianeW777
Expert Alumni

Divorce then sell home 2020

Yes, you will be able to file your your ex-husband's return with TurboTax. Use the following information to determine how you want to report the home sale

 

If only one of you received the document and you know you will not exceed the $250,000 exclusion (for single) then that spouse can file the entire sale.  There's nothing else to do. Do not report the sale on both returns under this method.  

 

If you both received a Form 1099-S showing half of the sales proceeds each should report their share on their own tax return.

 

IRS Rule for Taxpayers who divorce before the sale:

 

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:

  • You are a sole or joint owner, and

  • 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 the Form 1099-S had only one name (and SSN) on it for the full amount of the sales proceeds and you both want to report your portion of the sale you can choose to nominee 50% to the other spouse. The procedures for that are shown below.

 

Nominee returns

Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received).  You must also furnish a Form 1099 to each of the other owners. 

File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)

  • On each new Form 1099, list yourself as the payer and the other owner, as the recipient. On Form 1096, list yourself as the nominee filer, not the original payer.  The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.

The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here: 

If you lived in the home as your personal residence and you meet the Sale of Home Exclusion rules, you could potentially have no gain.

Also check out 'partial exclusion' if you don't meet the two year rule.

View solution in original post

2 Replies
DianeW777
Expert Alumni

Divorce then sell home 2020

Yes, you will be able to file your your ex-husband's return with TurboTax. Use the following information to determine how you want to report the home sale

 

If only one of you received the document and you know you will not exceed the $250,000 exclusion (for single) then that spouse can file the entire sale.  There's nothing else to do. Do not report the sale on both returns under this method.  

 

If you both received a Form 1099-S showing half of the sales proceeds each should report their share on their own tax return.

 

IRS Rule for Taxpayers who divorce before the sale:

 

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:

  • You are a sole or joint owner, and

  • 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 the Form 1099-S had only one name (and SSN) on it for the full amount of the sales proceeds and you both want to report your portion of the sale you can choose to nominee 50% to the other spouse. The procedures for that are shown below.

 

Nominee returns

Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received).  You must also furnish a Form 1099 to each of the other owners. 

File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)

  • On each new Form 1099, list yourself as the payer and the other owner, as the recipient. On Form 1096, list yourself as the nominee filer, not the original payer.  The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.

The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here: 

If you lived in the home as your personal residence and you meet the Sale of Home Exclusion rules, you could potentially have no gain.

Also check out 'partial exclusion' if you don't meet the two year rule.

View solution in original post

davenpoc
Level 2

Divorce then sell home 2020

Thank you.  Your response explained everything and in detail.  

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