Capital Gains

What is the name of your state? Florida

My wife an I are divorcing, we recently purchase a home 6 months ago. Neither one of us can afford to keep the home on our own, will we still be required to pay capital gains on any profits if we sell the home?

Thank you for your help.

Do you really think you'll make a profit after paying off the mortgage, sales costs, commission, etc? If you do, you *might* qualify for a reduced exclusion. Normally you have to own & live in a home for 2 of the last 5 years to exclude gain. However, if you don't meet the 2 year test, but have to sell the house due to job relocation, health reasons, or 'other unforseen circumstances', you can claim a reduced exclusion. If either of you got a new job (even if it's next door to your old job), you'll qualify for the exclusion. You might even be able to argue that the divorce was an unforseen circumstance. Check out Pub 17 & the schedule D instructions for more info.

Hi Abezon,

Thank you for getting back to me so quickly, After all is said and done we are going to make a profit somewhere in the 30 - 35K range and that is why I am concerned about the taxes. I put alot of work into the house, thinking I would be there a long time. My wife is currently looking for a job will this qualify for some type of exclusion? also do you know what the Capitol Gains Tax % is?

Thank You Again.

A new job followed by a house sale will allow you to claim the reduced exclusion. The maximum CG rate on a residence is 20% if you've owned the house for over a year; the same as your regular tax rate if you've owned it 1 year or less.

Thank You Very much for the information.

CD