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I have sold my house that I co-owned with a friend recently…

Hello, I have sold...

Hello, I have sold my house that I co-owned with a friend recently and made some money on the sale. I want to know if I will owe federal taxes and california taxes on the net profit. Thank you.

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Answered in 5 minutes by:
9/25/2017
Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2,408
Experience: Certified Public Accountant
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Hi, my name is Mark. I will be happy to help you with your questions. Did you live in the home? How long did you own the home?

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Customer reply replied 9 months ago
I lived in my house and owned it for almost six years.

If you lived in the home for at least 2 out of the past 5 years you would be able to exclude a gain of up to $250,000. Do you expect the gain will be greater than $250,000?

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Customer reply replied 9 months ago
I co-owned the house with my friend. Together we had a net profit of approximately $270,000.00. However it was split down the middle between the two of us so I took about $135,000.00.

Since your gain is below $250,000 (I am assuming that you were on the title), the entire gain would be tax free.

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Customer reply replied 9 months ago
We both were listed on the title. Does this mean that I owe no federal taxes on the sale and no California state taxes?

Yes, you would not owe federal or state taxes. The entire amount would be excluded from taxes.

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Customer reply replied 9 months ago
This is great news. Thank you so much.

It was my pleasure. If you would take a moment to rate my response I would greatly appreciate it. There should be stars located above the question. This is the only way that I will receive credit for helping you today. If you have additional questions or need clarification I would be happy to continue the conversation. Thank you.

Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2,408
Experience: Certified Public Accountant
Verified
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