I'm going through a divorce and my wife wants to buy the house. We have a little over $40,000 in equity in the house. She is going to refinance and give me $21,000. Do I have to pay taxes on this amount? I read somewhere if you profit $250,000 or less on the sell of a home you do not have to pay taxes. I have lived in the home for a little over 6 years and it's my primary residence.

Thanks,

Mike

No - you do not pay taxes on it. As you seem to be aware, you do not have to report the sale of your principal residence if you've lived in for at least two of the previous five years, as long as your gain on the sale is less than $250K.