I have a question regarding whether I should be filing any documents with the IRS on a personal asset split done because of the ending of a relationship. I purchased a home for $205,000, deeded in my name. Two years later I put my girlfriends name on the deed – she did not pay any money to me. During the course of the next 8 years we lived together and split the homes expenses, including the monthly mortgage payments equally, with her paying me a single monthly payment for her share of those expenses. She also paid directly for large improvements to the home – like $13,000 for a porch, $10,000 for remodeling the basement – in these situations she paid for the materials and I did the work myself. About 3 years into the relationship I did a mortgage refinance for a major improvement (pool installation) – at that time the new mortgage was signed as me being the primary and her as a co-signer.

When the relationship ended we agreed that I would buy her out of the home based on a professional real estate appraiser value less the current mortgage – ie… the equity position of the home. The home’s value was estimated at $326,000 and the current mortgage was $210,000 creating and equity position of $116,000. I proceed to refinance the home removing her name from the mortgage, we redid the deed removing her name from it and giving me sole ownership. I paid her half the equity in the home $58,000 less an agreed upon value of $12,240 for an engagement ring – (she kept the ring). My lump sum cash payment to her was $45,760. An agreement outlining all of this was written up by our attorneys in a separation agreement – then signed and notarized. My payment of $45,760 was made in January 2013. My question is should I be filing anything with the IRS to report this payment? Also does my cost basis for this home change if I were to sell it in the future?