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nsiraser
Returning Member

Home sales exclusion for co-owners

I co-owned a home with my brother since 1990s. Both of our names are in the title and tax forms. I moved out of the house around 2010 and the new home is considered my new primary residence, while my brother still lives in the house and it is his primary residence. If we sell the house for more than $400,000 profits (splitting the profit would be $200K each), would I be able to take the exclusion law for my half of the profit even though I technically am not using this home as my primary residence? I have never sold any homes before that so I have not used the exclusion law before. For my brother, since it is less than $250K in profit, he would be able to use the exclusion in capital gain.  All tax forms, titles, are still under our names still. Thanks

4 Replies
Critter-3
Level 15

Home sales exclusion for co-owners

No ... only he can use the exclusion on his half ... you have not lived there for 2 out of the last 5 years.  Your new home is certainly homesteaded as your personal residence.  Talk to a local RE attorney  and/or a tax professional   to see if  you may be able to quit claim the home to him BEFORE the sale  and then you will only need to file a gift tax return on the gift of equity where you would owe no taxes. 

tagteam
Level 15

Home sales exclusion for co-owners


@nsiraser wrote:

....would I be able to take the exclusion law for my half of the profit even though I technically am not using this home as my primary residence?


No, you will not be eligible for the exclusion since you did not use the home as your main home for the requisite period.

 

See https://www.irs.gov/taxtopics/tc701

Mike9241
Level 15

Home sales exclusion for co-owners

since the property has not been your primary residence in any 2 out of five years before the sale, you are not entitled to any exclusion. 

your brother should be entitled to the full exclusion

nsiraser
Returning Member

Home sales exclusion for co-owners

thank you

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