Tax implications on a buyout of co-owned property

[PixelPaul]

I'm wondering how the situation I explain below will affect my taxes as I am preparing to file. In 2019 I sold my interest in a single family home I jointly owned with a former girlfriend. We were never married. We bought the house in 2008 for $380,000 with both our names on the mortgage. We were both occupants in the home until 2015 when I moved out. After moving out I continued to pay my half of the mortgage until January 2019 when I accepted an offer to have her buy out my interest in the home. At that time about $200,000 remained on the mortgage, and my take away was $40,000. She has since refinanced the home and my name was removed from the mortgage and title. So I'm wondering how I declare this on my 2019 taxes. Is there a specific form I should be filing for this kind of situation? Should I expect to be taxed on my income from the buyout for such a situation?

[HelenC12]

It depends. You won't pay taxes on the first $250,000 (also known as a gain) you make from the sale or disposition of your home as long as it was your main home for two years or more within the five years leading up to the sale or disposition.

TurboTax will calculate a the tax (if any). Your home sale is reported under Less Common Income in the Wages & Income section. Here's how to enter the sale:

• Open or continue your return.
• Type sale of home in the Search box.
• Select the Jump to link in the search results.
• Continue with the onscreen interview until complete. 

Source: TurboTax FAQ

[Critter]

Your portion of the purchase price was $380K / 2 = 190K basis.

The outstanding mortgage  means nothing ... what was the fair market value at the time ... you take 1/2 of that for the sales price.  Then you deduct the basis  to get your profit or loss that you report on the Sch D.