Capital Gains and Divorce (mortgage, refinance, credit)

[SleeplessinNJ]

I'm really confused and need help if anyone has it.

My husband and I purchased our home in 1986 (in NJ) for the sum of 255,000. In March of 2007 we became divorced and with that the home was ordered to be sold. It states in the agreement that the home belongs to both of us and the profits will be split 50/50. The home will hopefully go for approx. 650,000. After expenses incurred by both of us including past IRS bills we'll be lucky to see 50,000 each!

My question is this. At one point we refinanced and at that time his name was removed from the mortgage and deed because his credit was so bad. He doesn't want his name on the mortgage..which is his reponsibility, but wants his name back on the deed. I know that there's something about 250,000 being able to be written off by each of us without paying capital gain however because his name is not on the deed he insists that I will have to claim and pay for all of the gain if I don't put his name back on it even though I will be purchasing another residence. I also don't know how that works!!

I'm totally stressed out right now and would really appreciate any help clarifying the difference in being listed on the mortgage and deed, and if he has to be listed on it in order to write off 250,000 as his profit even though it clearly states on our divorce agreement that the house belongs to both of us and the profits must be split accordingly. Our wills also state that the house belongs to both of us and should I die it will continue to be sold with him receiving his half and our 5 children splitting my half.

I'm hesitate about putting his name back on for various reasons.

Thanks for any help.......