Deed shows 50% Trust(mother in law), ex (25%), me (25%). Per the court order I was only given 9%, my children 3% of the profit of the sale of the house. Mother in law never lived in the house. Only our 2 names were on the mortgage. My ex not mentioned in the court order. How does all this work for taxes
From your description, it looks like you would claim any profit if applicable.
What was 25% worth when you obtained the house?
What was the 9% you received?
If the 9% you received was less than the ORIGINAL value of the 25%, their would be nothing to report.
If you made a profit, reporting would depend on whether this was your personal residence or an investment.
You don't write-off a loss on your tax return if you never claimed it as income in the first place.
There are exceptions for casualty loss, but losses because of divorce don't count as that.
Thanks for your answer. The 25% was of the sale of the house. Escrow sent me Tax form that had the value of 25% of the sale but that’s not the amount I received. The price on the tax form is over $200k but I received less than $38k. The tax form is what concerns me because 25% was changed to 9% me & 3%kids by the court
Yes my primary residence. Ex-mother in law never lived there.
You cannot claim a loss for two reasons: 1. The loss on the sale of personal use property is not deductible; 2. this may be considered as only a division of marital property and not a sale.
If there was a gain on the property, it is not taxable or even reportable if the gain was less than $250,000. You may exclude the gain on the sale of your primary residence up to that amount. Even if you don't meet the 2 year rule, the divorce and forced sale qualify as an exception (for a reduced maximum).
Q. How does all this work for taxes?
A, There is nothing to report unless you received a form 1099-S.