Sold home with ex-spouse and received 1099-S - How to report my portion on taxes?

You're dealing with a common situation that happens with divorced couples. Since you haven't lived in the house for the past 5 years, you unfortunately won't qualify for the primary residence capital gains exclusion ($250,000 for a single filer), which requires you to have lived in the home for at least 2 of the last 5 years. When you input this in TurboTax, you'll need to report the sale based on your ownership percentage. The 1099-S showing $152,000 represents your half of the gross proceeds. Your basis (cost) would be half of the original purchase price plus any improvements you paid for, so approximately $121,000 if there were no improvements. This means you have a capital gain of about $31,000 ($152,000 - $121,000). The "cash to seller" amount of $22,081.78 is what you actually received after paying off any remaining mortgage, closing costs, etc. This doesn't affect how you report the sale - you still use the gross proceeds and your basis.

I went through almost exactly the same situation last year! I was getting nowhere with trying to figure it out until I used taxr.ai (https://taxr.ai) to analyze my divorce decree and the 1099-S. Their system actually highlighted the specific language in my documents that showed how the capital gains should be reported based on my ownership period and helped me avoid a $5k mistake I almost made. The tool helped me understand that I needed to report the full amount on my 1099-S but also how to properly calculate my basis to minimize my tax hit. It asked me specific questions about my timeline of ownership and occupancy that TurboTax never did.

Just wanted to follow up - I tried taxr.ai after seeing this thread and it was incredibly helpful! I uploaded my faded divorce decree, property settlement, and 1099-S forms, and the system parsed through everything and showed me exactly how to handle the split basis calculation. The analysis highlighted that I was entitled to add some major repairs we did to the property to my basis, even though my ex had paid for most of them. This was based on specific language in our settlement agreement that I'd completely forgotten about. Ended up saving me about $3,800 in capital gains tax that I would have overpaid. Definitely recommend for anyone dealing with property sales after divorce!

If you're still having issues figuring out your tax situation, I'd recommend trying to speak with someone at the IRS directly. They can clarify how to report your portion of the sale properly. I was having a similar issue with property division last year and kept getting contradictory advice. After failing to reach anyone at the IRS for weeks, I finally used Claimyr (https://claimyr.com) and got through to an IRS agent in about 20 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent walked me through exactly how to report the sale of property after divorce and confirmed I was calculating my basis correctly. Saved me a ton of stress and potential audit headaches.

I need to apologize for my skepticism about Claimyr. After posting my comment, I decided to try it myself since I've been trying to reach the IRS about an amended return for almost two months with no luck. I used the service yesterday and got connected to an IRS representative in about 25 minutes. The agent confirmed they were with the IRS, verified my identity, and helped resolve my issue with my amended return that I filed 7 months ago. They even gave me a direct reference number for follow-up. This would have saved me SO much frustration if I'd known about it earlier. Sometimes being skeptical costs you time and peace of mind, lesson learned.

Don't forget to check if there were any capital improvements made to the property that could increase your basis! Things like a new roof, major renovations, additions, etc. can be added to your original purchase price when calculating your gain. Even though your ex was responsible for costs, if any significant improvements were made while you still jointly owned the property, you might be able to add your share to your basis, which would reduce your taxable gain.

Has anyone dealt with a situation where the ex-spouse refuses to share information about improvements they made to the property? My ex won't tell me what she did to the house after I moved out, but I know she finished the basement.

One thing to keep in mind is that since you haven't lived in the house for over 5 years, you'll be subject to capital gains tax on your portion of the profit. However, make sure you're calculating your basis correctly - it should include not just half of the original purchase price ($121,000), but also any qualifying improvements made while you owned the property. The fact that your ex was responsible for ongoing costs per the divorce decree doesn't change your tax basis, but any capital improvements made during your joint ownership period could increase your basis and reduce your taxable gain. Given the numbers you provided, you're looking at roughly a $31,000 capital gain ($152,000 - $121,000), which will be taxed as a long-term capital gain since you owned the property for more than a year. When entering this in TurboTax, make sure to indicate that you received a 1099-S and report your 50% ownership share. The software should walk you through the process, but double-check that you're only reporting your portion of both the proceeds and the basis.