Do I need to report the sale of a second home in NC that I owned w/ my now ex-spouse? I was on the mortgage w/ him (paid off at closing) and am filing separately.

[isavtaylor-gmail]

Home sold in 2020 and spouse paid all mortgage principal, interest and insurance.

[KrisD15]

No, 

if you both sold the house, there could be capital gains, but a buy-out due to divorce is not a taxable transaction. 

[isavtaylor-gmail]

Thanks. We both sold the house, and my settlement was paid from the proceeds. In this case, do I need to report the sale? I'm assuming he is did so on his 2020 taxes but am not sure.

[JohnB5677]

A divorcing spouse can elect to "buy out" or purchase the other spouse's financial interest in a home. 

For instance, when you have a home with a mortgage, it is common for one party to keep the house and pay the other spouse, or sell the house and provide the equity as a property settlement.

Mortgage payoffs and tax consequences are typically taken care of.   Divorce lawyers will help couples understand what part of the settlement is taxable.

[isavtaylor-gmail]

I was hoping for a definitive yes/no answer about whether I need to report the sale of the secondary home I owned w/ my ex in NC. Again, we were both on the mortgage, we sold the property and I received my settlement from the sale proceeds. From what I've read online, sale of a primary residence "incident to divorce" is not subject to tax, but I haven't found any answer regarding a secondary residence. Do I need to consult a CPA?

[JohnB5677]

Yes, you should report the sale in both North Carolina and in your home state.

If this was not your primary residence for at least two of the last five years you will pay tax on any gain.  If you held the property for more than a year it will be a long term capital gain.

Tax consequences are typically taken care of by  Divorce lawyers who will help couples understand what part of the settlement is taxable.

[isavtaylor-gmail]

Thanks again. One more question: Since we are filing separately, if he reports the sale do I need to as well?

[JohnB5677]

No, you do not have to include it on your return. 

He may have qualified for the exclusion and did not have to pay any tax.  If he did pay tax.  Your attorneys should work out the details.

[isavtaylor-gmail]

As I've received conflicting advice (one answer Yes, the other, No), I'm turning to a CPA.