Selling half the house in a divorce

[poohluvr]

What is the name of your state (only U.S. law)? Ks
I am not sure if this is the correct place for this, but here goes.
Spouse and I are getting divorced. The house is paid for, free and clear. Spouse is getting a home loan to pay me my half of the house and they stay in it.
I need to know if this will qualify to be excluded from capital gains tax? It is under the $250k amount too. I hate to think I will end up with very little if they start taxing what I am getting. I won't be able to buy a house for a little while either.
It is a sale, but only half a sale. Does it qualify? How do I make sure I don't lose a huge chunk of my money?
Thanks in advance for any answers.

 

[LdiJ]

What is the name of your state (only U.S. law)? Ks
I am not sure if this is the correct place for this, but here goes.
Spouse and I are getting divorced. The house is paid for, free and clear. Spouse is getting a home loan to pay me my half of the house and they stay in it.
I need to know if this will qualify to be excluded from capital gains tax? It is under the $250k amount too. I hate to think I will end up with very little if they start taxing what I am getting. I won't be able to buy a house for a little while either.
It is a sale, but only half a sale. Does it qualify? How do I make sure I don't lose a huge chunk of my money?
Thanks in advance for any answers.

No, this would not be a taxable event. A buyout persuant to a divorce is not a taxable event. In any case, capital gains tax only applies to the profits on a home sale. Original purchase price plus the cost of improvements = basis. Selling price minus sales expenses minus basis = capital gain...then the 250k capital gains exclusion would be applied to a primary residence. Therefore the odds of you having to pay tax would have been slim even if you and she were not getting divorced and were selling it to a stranger.

 

[poohluvr]

Thanks so much for responding LdiJ! I feel relieved.
PS. Not that it matters, but I am the she.lol

 

[williams03]

Thanks for this useful information...I was confused about this now I am clear thank you