Sale of a house with 2 peoples names on title

[10409000]

good morning, I have a client that needs to report a sale of a home. They were boyfriend/girlfriend not married, lived in the home together for 1.5 years so they don't qualify for an exclusion. I am wondering how do i report the sale of the home when it was two individuals on title? Do I just report 50% of the gain on each person's taxes? I was kind of lost on how to report that and thinking maybe I should refer them to another tax preparer with more experience. your help is greatly appreciated. Thank you!

[garman22]

Are you sure they dont qualify for a reduced exclusion?

Sounds like to me you would split the sale 50/50. Did they each receive a 1099-S? Thats a fairly simple process. 

[taxes96786]

The client/s need to tell you what percentage each owned. You allocate the percentage on each Single return. They do qualify for 1/2 the credit each. I recommend you include Statement of explanation  on each return.

[dkh]

Had same situation.  Each received a 1099-S with the amount agreed upon when doing closing documents.  Have your client look through that large stack of paperwork they would have received.

As for the principal residence exclusion....do they qualify under the "Unforeseen circumstances" ? 

[10409000]

Thank you! They broke up and decided to sell the home and go their separate ways (they were not married) so i wasnt sure if that would count as a unforeseeable circumstance. I feel like it would but when the irs pub doesn't state it black and white then I get nervous.

[garman22]

IRS has, in my opinion, left that door open. Me personally, I would take that into account in determining whether that would qualify or not. 

I cant tell you what I would do as Intuit doesnt back us in any way if for some reason they are audited and lose. 

[taxes96786]

Most morgage companies won't do this unless they are asked to.