You would need to consult your tax attorney or accountant on this question. However, when I received my training as a Senior Real Estate Specialist, the $65,000 plus the cost of the original sale plus any capital improvements on the home should be your cost basis. If you are both on the deed, you should have a $500,000 ($250,000 for each of you) exemption. Once you sell your home, you would subtract the costs of the sale (closing costs-real estate compensation, transfer taxes, attorneys' fees, etc.) from the sales price, then subtract the $65,000 (less amortization taken) and any capital improvements you made on your home, then subtract the $500,000. Whatever is leftover may be leave you with capital gains exposure. If you are purchasing another home, you may want to speak to your accountant or tax attorney about a 1031 exchange. If you do this, you may not have any exposure.
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