@bmyers7711 so you may have to supplement the facts in your questions. Generally, if you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return with your spouse.
In general, to qualify for the Section 121 exclusion, you must meet both the ownership test and the use test. You're eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale. You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale. Generally, you're not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.
You would appear to meet the test based upon the facts you laid out below. I am not sure if your wife does though based upon the facts below. When was it her primary home in 2022 and when were you transferred and sold in 2022 are important.
Furthermore, there could be a partial exclusion due to the move as well. If you moved due to a job change of more than 50 miles, you do qualify for a partial capital gains exclusion. If you moved due to a job change of more than 50 miles, you do qualify for a partial capital gains exclusion. The exclusion is based on the shorted of three time periods; how long you owned the home, how long you used it as your main home, and how long since the last time you used the exclusion.
Also left out is how much the house was purchased for and sold. Based upon the relatively short time period (three years), it would appear unlikely that the sale price exceeded the purchase price by at a minimum $250,000.
All the best,
Marc T.
TurboTax Live Select Time Tax Expert
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