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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15164
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I currently own a home (in New Hampshire) with my significant

Resolved Question:

I currently own a home (in New Hampshire) with my significant other. We are in the process of separating. I have agreed to leave the residence if he "buys me out". I have agreed to a number that is less then half of the real estate value even though I am an equal owner. If he pays me a lump sum, what are the tax implications for me? In other words will I owe the IRS money for income through the sale of the real estate? And if I am agreeing to less then 50% of the fair market value, is it considered a loss?
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

MyVirtualCPA :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

MyVirtualCPA :

How are you today?

MyVirtualCPA :

Have you lived in the house for at least 2 years?

MyVirtualCPA :

If so, you can exclude up to $250,000 of gains

MyVirtualCPA :

Your gain is calculated by taking 1/2 of what you purchased the house for and subtracting it from the amount of money you receive in the transaction

MyVirtualCPA :

If what you paid is more than what you are getting, there is a loss and no tax. The loss is not deductible

MyVirtualCPA :

If what you paid is less than what you get, you have a gain. You can exclude up to $250,000 if you lived there for 2 years or more

Customer:

We have been in the house over 20 years, it is almost paid for. I think we bought it for around $113,000 and it may be worth around $200,000 now. I am excepting $61000.

MyVirtualCPA :

You have a $4,500 gain, but it is excluded. You owe no tax and do not report this transaction on your tax return

Customer:

really? that is a good thing!

MyVirtualCPA :

The fair market value of the house does not impact your gain or loss - it's based on what you paid for the house

MyVirtualCPA :

Yes...you're in good shape. Better than you thought?

Customer:

I see.

MyVirtualCPA :

Do you have any further questions about this?

MyVirtualCPA :

If not, please rate my response as "excellent" so that I may receive credit for assisting you today

Customer:

Yes I was afraid I would end up paying taxes.

MyVirtualCPA :

Well, fortunately you don't in this situation

Customer:

I don't think I have any other questions. I will be able to print a transcript of this correct?

MyVirtualCPA :

Yes, using the browser print function. And before you leave, please don't forget to rate

Customer:

I will thank you.

MyVirtualCPA :

You're welcome

Customer:

You have been most helpful.

MyVirtualCPA :

I'm glad you think so :-)

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15164
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 3 other Tax Specialists are ready to help you
Expert:  Megan C replied 1 year ago.
Thanks, Kim for your positive rating. Please come back and visit MyVirtualCPA any time you have a tax, finance, or social security question. IT was a pleasure working with you today.

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