My wife and I are married filing separately this year. Last year we sold our home. On who's return do we report the sale or do we have to put it on both?

[SeanE1]

If you want to split the 1099-S 50/50 between the two of you is fine. When a married couple sell their primary residence that they have lived in for at least two of the last five years, the IRS allows a capital gain exclusion for that sale.  For a married couple filing separately, the exclusion is up to $250,000 for each spouse, and up to $500,000 for a married couple filing jointly. For more information on the capital gain exclusion see this Link:

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

To include the 1099-S that you should have received from the sale of your home follow these steps:

Please follow the steps below to include your 1099-S on your tax return:

• Go to Federal Taxes

• Select Wages & Income

• Click I'll choose what I work on

• Scroll down toward the bottom and find the "Less Common Income" section 

• Select Start next to Sale of Home

• Go through this section and include your 1099-S information.

[BalMarak]

My wife and I both got form 1099-S for the full sale price of the house, but we are filing separately. How do we deal with this?

[DMarkM1]

Yes that is common for joint property to receive the same 1099-S for the full transaction.  Follow the steps outlined by SeanE1 above for each of you to report half of the sale on your respective returns.  

[BlueberryJamming]

Hello Friends, 

I followed SeanE1's steps and found a few problems.

1) The prompts do not say to enter half of the sales price of the house and half of the sales expenses.... the prompt asks for the full sale price of the house and the full sales expenses... 

2) And when listing the adjusted cost bias it also makes no distinction about the value being split...

3) So, when you follow the steps one is left with entering all of the full amounts and the turbo tax equation congratulates you on having saved $250,000 in capital gains taxes, but leaves you on the hook for the other $250,000 (assuming you have more than a total of $500,000 in gains). 

4. The only way I could find to get the full credit was to go back to the beginning and act as if we were married filing jointly (which would actually be very difficult to do)... in this case the full $500,000 was waived.

5. So if one is filing married separately, which processes as single, how do you distribute the $500,000 joint benefit between the two people filing married separately? The only work around I could see was to split the sale price of the house in half, same with the sales expenses, same with the adjusted cost basis....  the problem with that is, the IRS has only one 1099-S on file that lists for the full sales price of the house....

Help!

[AbrahamT]

You could make a copy of it for each one of you to keep. This way you both have the backup and it could be later explained if this  ever comes up as an issue.

[BlueberryJamming]

thank you for that suggestion!