Reporting home sale with two owners

[tailon273]

I owned a home in joint tenancy with my father. We bought the home in 2010 for around $300,000 and sold it in 2020 for around $450,000. We will be filing separate tax returns. We both fulfill the living/ownership tests for total gain exclusion ($250,000 gain excluded for each owner).  By simple calculation ($450,000-$300,000), the total gain is $150,000. Since there are two owners, each of our gain is only $75,000, well under the $250,000 primary residence exclusion limit.

Now the 1099-s we each received showed me and my father received $225,000 each from the home sale ($450,000 gross sale price divided by two owners).

But to report this on the federal tax return, it asks for the home original basis. Now I assume that for each of us the basis would be $150,000 and not the gross $300,000 correct? Because if I were to put on my tax return that the basis was $300,000 and I received $225,000 selling it 10 years later, it would appear as if it was sold at a loss and that makes no sense at all.

Just making sure since this issue wasn't really talked about in the IRS instructions for home sale and Turbotax requires manual input of the basis. Thanks.

[tagteam · Accepted solution]

---

@tailon273 wrote:

....Now I assume that for each of us the basis would be $150,000 and not the gross $300,000 correct?

---

That is correct; as joint tenants you each owned an undivided one-half interest in the property and you would divide the total basis by two (i.e., your basis would be $150,000).