Question

Divorce and excluded capital gains

Forum|Forum|1 year ago
March 16, 2025
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I sold my house as a result of a divorce in 2023, and then bought a house with the proceeds in 2024. My share of the capital gains was less than $250,000. The money sat in an investment account for a few months until I bought the new house. The investment company reported all the proceeds from the transaction to buy the new house on a 1099-B and it looks like a big sale from which no taxes were withheld. What do I do about this on my 2024 taxes?

rjs

If you got a 1099-B you must have invested the money in stock, a mutual fund, or some other investment. The 1099-B reports the sale of that investment. It has nothing to do with selling a house or buying a house. You report it on your tax return as it appears on the 1099-B.

But you are not taxed on the full amount of the sale. You only pay tax on the profit. The profit, or gain, is the difference between the amount you received for selling the investment (the proceeds) and the amount you paid for it. The 1099-B shows the proceeds and the cost (basis). If you only owned the investment for a few months, the gain is probably very little. Enter it in TurboTax as shown on the 1099-B and see what the results are.