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@MGC94 wrote:

Since this wasn't their primary is there no home sale exclusion? 

There was no 1099 but each 50/50 on taxes?

Do they have to file NJ to get back the 2%?

Can he no longer be her dependent because now he will have income other than social security? 

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Correct.

If they each owned 50%, yes, both report 50% of the sale.

Why do you think they will get back the 2%?  I don't know NJ rules, but in most states it would be taxable in that state.  At any rate, yes, they need to file a NJ tax return.

If the person's non-exempt income (Social Security is exempt) is over $4700 (2023 amount), you are correct, that person is no longer a dependent.