Clients are a father and his son who both owned a home that they sold in 2020. Gross proceed for this home was $400,000, and this amount was split 50/50 on each 1099-s for the father and son. So the son's 1099-s showed gross proceeds of $200,000, and the father's 1099-s showed gross proceeds of $200,000. This was their primary residence and both pass the living/ownership tests, and since they purchased this home in 2008 for $300,000 their capital gains are exempt from tax. Both are filing under single status.
My first question is the cost basis. I'm assuming that I just split the original purchase price $300,000 by half, so on Form 8949 the cost basis would be $150,000 for the father and the son (They were joint owners with rights of survivorship and had 50/50 stake the entire time). Thus each of their capital gain would be $50,000. Is this correct? Putting in $300,000 doesn't make much sense considering the 1099-s is reporting $200,000 gross proceeds.
My second question is how do I determine the exact cost basis. The clients furnished the original purchase settlement to me. Here's the link so you can see the settlement form (identifying information has been removed):
https://postimg.cc/Q9HBFNdX
https://postimg.cc/hXQcQJ9Z
So do I just take the contract sales price of $300,000 (line 101) as the basis? I seem to recall HOA costs can't be counted as the basis. But since both owners are well under the home sale capital gains exclusion limit, it wouldn't really matter if I made a minor mistake here correct? Otherwise what is the precise cost basis for this home based on that settlement form?
Thanks a lot for your help. It's greatly appreciated.
