Which California Tax return will I need to file if we sold our California house (that we did not live in nor rent out) and was sold as part of our divorce settlement?

[mandmdye]

My ex filed a 1040 last year (as married filing jointly since our divorce was not yet finalised while taking the exemption for my daughter and I).  I am not working and he has not been paying the child support nor alimony in the divorce settlement.  I found out that he did not file a California tax return, but one needs to be filed since we sold our property in California (we are expats living in Asia but my daughter and I do not live with my ex).  He said since I received the house, he was not responsible for the capital gains taxes on the sale of our California house, therefore the tax liability is mine.  Can someone please provide some guidance on this situation?  Thank you.

[Zbucklyo · Accepted solution]

You will file a California Form 540NR, the tax form that non-residents of California fill out.  It is unclear what you ex-husband means.  It is also unclear whether the joint federal tax filing includes information about the sale of the house.  If you received the house as part of a divorce settlement he may be correct, but you should consult a tax professional and more clearly explain your situation to determine whether the tax liability is joint or not.  You also need to get a copy of the joint federal return to see what your ex-husband included.

If you lived in and owned the house for two of the past five years as your primary residence, you can exclude up to $250,000 of the capital gain from taxation.  On a joint return, if the same situation applies to your husband, you can exclude up to $500,000 of the gain.