My wife and I are expecting to make a decent profit from the sale of our 1st house. We are separating so we will not be buying another house anytime soon. What kind of taxes/penalties should we expect to pay in order to pay off bills, split the profits, etc?

There should be NO taxes and NO penalties.

In 1997, our beloved Congress changed the tax laws and made any profit (up to $500,000 for a married couple) made on the sale of a personal residence TAX-FREE.

You do not even have to report the sale on your tax return.

That's England; this is the U.S. tax law.

If you are sending this from England, all bets are off, as my expertise is for U.S. tax law ONLY!