A friend's primary residence is in New York City and he also owned a house in Florida where he spent winters. He was in a registered domestic partnership in NYC for many years and married his partner shortly after it became legal in the state. His partner lived in Florida full-time and was CO-OWNER on the deed, and died about six months ago. My friend was forced to sell the Florida house at a profit of about $100,000. [before deducting for improvements, etc].
The tax code says that since the Florida house was not his primary residence he's not entitled to the $250,000 tax free profit on its sale. But the co-owner, his legal domestic partner/married partner was entitled to the deduction, which should pass to my friend and more than cover his profit.
The $100M profit is only the difference between the original purchase price and the sale price, and I haven't considered calculating the book value of the decedents portion of the houses' value and whether that has any impact on the equation.
Any thoughts? Is there any profit from the sale that needs to be declared?

