1099 issued on a home sale
If I am the only one on title and I am divorced and co-habituating with my ex-husband until my home is sold so he may receive 1/2 the equity where ( based on our marital Settlement Agreement, he is supposed to pay taxes on his half of the proceeds) does he receive a 1099 from the title company for his share?
Terry Says
The taxes owed depend on your divorce agreement. The 1099S will be sent only to the person whose name is on the title. As a single owner you are exempt from the first $250,000 of gains. (If you had previously BOTH been on the title, the mistake was to put it in your name! If both were on the title, you would have had a $500,000 exemption! And if your attorney didn’t explain that to you it is malpractice!!)
So, here’s hoping that your gains are less than $250,000 since it is only in your name. Anything above that amount (and your base cost is increased by any improvements you made to the house and can document, not just your original purchase price) but above that the excess is taxed as a long-term capital gain for YOUR portion (if you initially owned it jointly) or all excess will be taxed as a long term capital gain if you hold the property for more than one year after his half was put into your name!!
If taxes are owed on the excess, you might want to withhold half of those taxes from the proceeds since it appears that is written into the agreement.
Yep, it’s complicated. And a good divorce attorney takes these things into account.
