My ex-partner and I sold our home and split the profit. How do we handle?

[leeloo]

Are you married? Were you both owners? Did you receive a 1099-S? 

The simple answer is that you divide the cost and any improvements. Then you divide the sales price. However, we need more information. 

[kareneriko]

Hi! We were not married but we were both owners. Did not get the 1099-S.  

[leeloo]

On your separate returns, divide the cost 50/50 (or any way you choose). If you made improvments, theat percentage is added to the basis. You subtract that from the sales price to determine your gain. You may qualify for the exclusion.

If you meet the qualifications to use the exclusion, any gain over that amount is a capital gain. The exclusions are $250,000 for single, and $500,000 for married filing jointly. See the rules below.

Does Your Home Sale Qualify for Maximum Exclusion

The tax code recognizes the importance of home ownership by providing certain tax breaks when you sell your home. To qualify for these breaks, your home must meet the Eligibility Test , which is explained later.

How your sale qualifies.   Your sale qualifies for exclusion of $250,000 gain ($500,000 if married filing jointly) if all of the following requirements are met.

• You owned the home and used it as your main home during at least 2 of the last 5 years before the date of sale.
• You didn’t acquire the home through a like-kind exchange (also known as a 1031 exchange), during the past 5 years.
• You didn’t claim any exclusion for the sale of a home that occurred during a 2-year period ending on the date of the sale of the home, the gain from which you now want to exclude.

You may not be required to report the sale at all if you meet the excluion since you didn't get a 1099.

[TeresaM]

If this was your primary home, you will report that in the Wages and Income section.

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In general, you will divide the basis, or the amount of money you have in the house, and the sales price by whatever percentage you divided with your partner. However, if you were married and in a community property state, those have additional rules. If this was your second home or your rental property, it will be entered in another area of the return.