Contact UsI am married. I am selling my personal residence after living there for 2-1/2 years. Title is only in my name. I will have a gain of more than $250K. Can I claim the $500K (for me & my spouse) option not to pay taxes on the gain?
I have never taken that option.
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Tax Professional Answers
Randy Tarpey
IRS Code Section 121 allows the exclusion of gain from the sale of a primary residence by certain married taxpayers filing a joint tax return of $500,000. Publication 17 clarifies the rules for married couples: You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true.
You are married and file a joint return for the year.
Either you or your spouse meets the ownership test.
Both you and your spouse meet the use test.
During the 2-year period ending on the date of the sale, neither you nor your spouse excluded gain from the sale of another home.
If either spouse doesn’t satisfy all these requirements, the maximum exclusion that can be claimed by the couple is the total of the maximum exclusions that each spouse would qualify for if not married and the amounts were figured separately. For this purpose, each spouse is treated as owning the property during the period that either spouse owned the property. Publication 523 explains and clarifies other definitions under section 121 like the use test and other unique situations that don't seem to apply to your situation for example former like kind exchanges. Based on your question it appears you do qualify for a full gain exclusion.
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378 weeks ago
You are married and file a joint return for the year.
Either you or your spouse meets the ownership test.
Both you and your spouse meet the use test.
During the 2-year period ending on the date of the sale, neither you nor your spouse excluded gain from the sale of another home.
If either spouse doesn’t satisfy all these requirements, the maximum exclusion that can be claimed by the couple is the total of the maximum exclusions that each spouse would qualify for if not married and the amounts were figured separately. For this purpose, each spouse is treated as owning the property during the period that either spouse owned the property. Publication 523 explains and clarifies other definitions under section 121 like the use test and other unique situations that don't seem to apply to your situation for example former like kind exchanges. Based on your question it appears you do qualify for a full gain exclusion.