Hello. I have just been to visit the local IRS office about tax
consequences of my upcoming house sale, but I am still uncertain how to
In my divorce four years ago, the deed to the jointly owned house was
given to me, but the decree requires me to pay a certain amount to my
ex-spouse on sale of the house. The amount is $100,000 plus 33.4% of the
gain since the end of 2004.
In the sale, I will have:
Amount received: $570,000
Amount I turn over to ex-spouse: $130,000
The IRS agent said that I will receive a Form 1099-S from the title
company, indicating a sales price of $570,000; and that I can file a
1099-S form myself as a "nominee recipient" to indicate that I passed
$130,000 of the sales proceeds to my ex-spouse.
Under these circumstances:
1. What do I use as my basis in reporting the house sale? The entire
$200,000 or just a part of it?
2. Will I be able to claim the full $250,000 capital gain exclusion on
sale of my main house?
3. Will my ex-spouse also be able to claim a $250,000 capital gain
For Question 3, the agent referred me to IRS Publication 523, Selling Your
House, page 15, which indicates that you are "considered to have used
property as your main home during any period when (1) you owned it, and
(2) your spouse or former spouse is allowed to live in it under a divorce
or separation instrument and uses it as his or her main home."
Would my ex-spouse qualify under this rule? How do I determine whether
the law counts him as "owning" when the deed is just in my name?
Many thanks for any help you may provide. I am just trying to get all my
informations in order before visiting the tax attorney because I wasn't
able to get a clear answer on an earlier visit.
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- posted 12 years ago