My husband and his father own our home jointly. Is my father in law going to be responsible for paying taxes on the money we profit when we sell?

[nevermore1998]

My father in law has never lived in our home, we have been in our home for 7 years. He has never contributed monitarily. When we sell we will profit 100,000 dollars. How does the 250/500 rule work. My husband and I have always claim the home on our taxes

[PatriciaV · Accepted solution]

As a part-owner of the home, your father-in-law will need to report his portion of the sale proceeds on his personal tax return. You and your spouse will report the other portion, but only if you have more than $500,000 in profit.

If you wish to avoid this situation, your father-in-law can file a Quit Claim Deed for his portion of the property. Check with a local real estate professional for assistance with this option.