How do I determine that cost basis for the home I sold. The house (and related mortgage) became mine 5 years ago at the time of a property settlement for a divorce. Before that, my husband and I shared ownership.

ANSWER

The BIDaWIZ Team's Answer:

Even though the property settled through a divorce five years ago, the cost basis is still the original purchase price of the home plus any additions. Therefore, if you paid $400,000 for the home 10 years ago with your previous spouse, then that would be your cost basis. Please note that you can still claim the capital gains exclusion of up to $250,000 if you're a single filer and $500,000 if you're a joint filer.