Good morning. Your home is your primary residence...so when you sell your home, you will be entitled to a $250,000 exclusion from capital gains from the sale of your primary residence. Your equity in the house is not relevant in determining what if any gain you have on the sale. Since you and your daughter each own 1/2 of the house, each of you have a basis in the house equal to 1/2 of your original purchase price plus 1/2 of the cost of any improvements you made. So, when the house is sold, the gain recognized by each of you will be 1/2 of the sales price (less closing costs) less your basis.
I hope this has given you the guidance you were seeking. I wish you the best of luck!
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The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.
I will opt out and let another tax expert address this for you.
Both you and your daughter each would be able to exclude up to $250K in gain, provided that each of you meet the IRS's ownership and use tests. Note that if you meet the criteria and your daughter doesn't, you can still exclude 250K in gain, she just would not be able to.
Both tests apply to the 5 year period prior the sale:
1) Owned the home for at least 2 years (ownership test)
2) Lived in the home for at least 2 years (use test)
So, at the present time, you meet both tests and would be able to exclude $250K in gain. Your daughter currently only meets the use test since she has only been on the title for a month.
In the event you sale the home before your daughter qualifies for the ownership test, her portion of the gain would be a capital gain (long-term if owned more than a year). Short-term gains would be taxed at her regular income tax rate, but long-term gains are currently taxed at a rate of 15% if in the 25% tax bracket or higher or 0% if in the 15% tax bracket or lower.