Home sale after divorce

[gbworld]

We jointly owned the house, but sold after divorce. When I enter in the sales amounts, I get a huge tax bill for capital gains, which is incorrect. How do I reflect I only gained half the money?

1. Half everything on the taxes

2. Find an easy "I got divorced button" that will calculate it for me? Please be the right option.

3. Edit the tax form? Can't seem to edit in form mode.

I am inclined to open excel and half everything, as I cannot figure out the best route to go otherwise. She was on the original home and this home.

[DavidD66]

You should only report 50% of the sales proceeds and cost for the house.  It was your primary residence for any 24 of the 60 months leading up to the sale then you can exclude up to $500,000 of gain - total ( $250,000 for each of you).   There is no "Divorce" button that halves everything.  You just report what applies to you.  In this case, 50% of the sale.

[Mike9241]

reporting may well depend on what's in the divorce decree. it could state that you get full ownership of the house but your ex as a property settlement gets 50% of the net cash when sold. something like this would mean you report and pay taxes on 100% of the gain. wording varies from state to state and we can't see what the divorce decree states as to the house. 

if only your SSN is on the 1099-S then you need to report 100% of the sales price and then subtract 50% of the gain if she was co-owner at the time of sale. that's because the IRS will match what you report with what's on the 1099-S. 

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[msparkin1]

Hi, I sold a marital home, that was titled in my name, after the divorce was finalized.  We lived in the home for the last 7 yrs, as a primary residence and filed MFJ taxes.  Due to me owning the home, I received the 1099s for the full sale proceeds even though it qualifies as the $500k marital deduction.  Can I file my taxes with 50% basis and my portion of the gain and my ex spouse do the same?  I am concerned because the 1099 is attached to my social.  The other option is claiming the full sale proceeds, then issuing my ex spouse a 1099 for her proceeds.  How do I issue a 1099s in Turbo Tax?  

[DaveF1006]

It depends.  There are several ways to report this and IsabellaG has written a very comprehensive article on this subject in her Turbo Tax post.

Isabella suggest that you report 50% of the proceeds and 50% of the cost basis on your own return to report your share of the gain. Then your ex can do the same on their return. If the IRS contacts you about this, since the 1099 was issued in your name, you can explain that his sale was reported correctly. 

She does suggest that you issue a 1099 S to your spouse to avoid any communication from the IRS questioning why only 1/2 of the1099 was reported. Please read the post thoroughly as it explains how to order and complete form 1099 S.