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How is tax divided?

The ex-spouse and myself are selling two rental homes as a result of a divorce that's final.

Per our agreement, the ex-spouse will receive a larger portion of the proceeds from the sale. For example, the ex-spouse will receive 75 percent of the proceeds and I receive 25 percent.

The homes are titled in both our names, but the mortgages are only in my name. Not sure if that makes a difference.

Obviously we'll file seperate.


Thanks for your question.

As a result of the sale, the mortgages should not be an issue in dividing the profits. You determine the gain or loss from the sale by subtracting your adjusted cost basis from the sale price (minus costs of sale).  The mortgages do not enter into the determination of gain or loss.  Profits are normally divided according to ownership percentage.  Lacking any other information, this would be equal.

There is a difference in taxable gain or loss (which I described above) and the proceeds of the sale. The proceeds are what's left after settling everything including the mortgage. This can be a significant difference from the amount of gain or loss.  How the proceeds are distributed is a property settlement issue.

Bottom line, you need to determine how the two of you are going to define the distribution and the profits/losses.

BTW, since the divorce is final you must file single or head of household (if you qualify).  

Hope this helps.

John Stancil, CPA

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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