Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

Capitol gains taxes -I am a realtor. A client stands to make…

Customer Question
Capitol gains taxes -I am a...
Capitol gains taxes
-I am a realtor. A client stands to make $264000 (= sale price - purchase price). He and is ex wife have lived in the property since april 2014 (over 3 years). Part of the divorce decree states he owes exwife 120k. the question is can we deduct the 120k owed to the ex from the proceeds and thereby avoid the capitol gains on $14k.Thanks for your thoughts.
Submitted: 8 months ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 2 hours by:
9/17/2017
Tax Professional: Barbara, Enrolled Agent replied 8 months ago
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 5,993
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
Verified

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

If your client and his wife owned and lived in the property for at least 2 of the 5 years immediately preceding the sale, they each can exclude up to $250,000 of the gain from the sale of the home.

The gain is the DIFFERENCE between what they paid for the home when they purchased plus closing costs and improvements and the selling price less closing costs. Each would report 50%

For example, if they purchased the house for $240,000 and had $10,000 in closing costs, $250,000 would be their basis.

If they sold the house for $500,000 and had $50,000 in closing costs, the sales price would then become $450,000.

The difference between $450,000 and 250,000 is $200,000.

They would each report half the basis, half the sales price, and half the gain. Half the gain is $100,000 for each of them, and all of the gain is excluded for each.

In your example, they each have a gain of $132,000, and each can exclude it.

Further, the title company/closing agent should not issue Form 1099-S if the property has been their primary residence for 2 of the 5 years immediately preceding the sale, and the sale is NOT required to be reported on their respective tax returns.

Please let me know if I can assist you further.

Thank you and best regards,

Barb

Ask Your Own Tax Question
Was this answer helpful?
Ask Barbara Your Own Question
Barbara
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 5,993
5,993 Satisfied Customers
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.

Barbara is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,495 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,272 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
I received a 1099 S after I filed my taxes for the sale of
I received a 1099 S after I filed my taxes for the sale of my mother in laws condo after she passed. Do I file an amended return? How is inheritance taxed? she paid 117000 in 1994 and it sold for 8000… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,199 satisfied customers
My wife sold some timber and received a 1099-S for the sale.
my wife sold some timber and received a 1099-S for the sale … read more
Mark Anderson
Mark Anderson
Attorney
Doctoral Degree
10 satisfied customers
IRS Tax Question: Should a 1099-S be for the total sale
IRS Tax Question: Should a 1099-S be for the total sale price of a property or can it be for a different amount?… read more
Barbara
Barbara
Enrolled Agent
5,993 satisfied customers
On line 17, Form 1120 ,C Corp Federal Tax return are state
On line 17, Form 1120 ,C Corp Federal Tax return are state corporate income taxes deductible.If I am doing my Federal C Corp returns for 2017 are the state corporate income taxes due but not paid yet … read more
Barbara
Barbara
Enrolled Agent
5,993 satisfied customers
I have received 1099 S for the sale of a house I built and
I have received 1099 S for the sale of a house I built and sold! I never lived in that house. I bought land in 2010 and never claimed property taxes I paid. I took private hard money loan and paid int… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,199 satisfied customers
If you received a form 1099-c from a rental property where
If you received a form 1099-c from a rental property where is it reported on the 1040. Ex. Property held for over a year. Amount owed per 1099- C is 150,000 fmv 90,000 … read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
1,026 satisfied customers
My daughter had a 1099-MISC form from the sale of an FFA
My daughter had a 1099-MISC form from the sale of an FFA project animal. … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Form 1099S. Box 2, gross ant of sale. If a property was sold
Form 1099S. Box 2, gross ant of sale. If a property was sold by three people what is the gross amt of sale? Is it the total gross or just the gross of one persons share? Also can two people be named o… read more
Carter McBride
Carter McBride
LLM
1,046 satisfied customers
Is there a way to determine if a Sub S tax return filed for
Is there a way to determine if a Sub S tax return filed for 2016 and if the return was marked "Final"? … read more
abci168
abci168
Principal
27 satisfied customers
On the 1040A form how can i deduct state property tax (
on the 1040A form how can i deduct state property tax (Washington State)? … read more
James Daloisio
James Daloisio
Attorney
Doctoral Degree
214 satisfied customers
I have not received my or my husband"s 1099 tax forms for
I have not received my or my husband"s 1099 tax forms for this year. I have not been able to start an account for either of us on line so I can download them.Cannot have my taxes done as a result. … read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
128 satisfied customers
Divorce 4 years ago. In the divorce there were 2 properties
Divorce 4 years ago. In the divorce there were 2 properties that were divided. One for the wife another for the husband. Ex-Husband defaulted in his mortgage of the property he was awarded. He lived i… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I sold investment property in Nov. 2017, I got a 1099-S, and
Hello Pearl, I sold investment property in Nov. 2017, I got a 1099-S, and tried to due 1031 exchange but failed in 2018. I got a CA 593-C for taxes withheld, documents states "2018." Can I file for 20… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,199 satisfied customers
I received Form 1099-S following the sale of my mother's
I received Form 1099-S following the sale of my mother's property. I was the Administrator of her Trust. The property sold for $230K and the proceeds were divided 4 ways; among me and my 3 siblings. D… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,199 satisfied customers
Amended Form 1099-Misc the original tax year 2017 Form 1099
amended Form 1099-Miscthe original tax year 2017 Form 1099 was understated . How do I correct this… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
I received a 1099-s from a title company from a sale of my
I received a 1099-s from a title company from a sale of my Husband's Mothers house that was sold last year … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,199 satisfied customers
I received a 1099 S for sale of a second home for personal
Hi, I received a 1099 S for sale of a second home for personal use on which I had a loss. The house sold for 80001 and the fair market value was 170000. Can I deduct the loss on the sale? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
The title company for the sale of my house sent a 1099-S to
The title company for the sale of my house sent a 1099-S to the government when they should not have… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x