Since these properties are primary residences, you will be able to exclude some or ALL of the associated capital gains associated with the sale of the properties. To qualify, you must have owned your home and used it as your main residence for at least two years in the five-year period before you sell it. You also must not have excluded another home from capital gains in the two-year period before the home sale. If you meet those rules, you can exclude up to $250,000 in gains from a home sale if you’re single and up to $500,000 if you’re married filing jointly.
The capital gain on a property is the sale price less selling expenses less the basis of the home (basis = purchase price plus capital improvements made over the years of ownership)
For the property purchased in 1989 this would equate to $400,000 - $32,000 (estimated selling expenses) - $135,000 = $233,000 capital gain. This entire capital gain would be excludable from your income so I would sell this property first before your marriage.
The property purchased in 1973 is more complicated. Quick math and assuming $0 capital improvements over the years, the capital gains would be: $600,000 - $48,000 (estimated selling expense) - $40,000 = $512,000 capital gain. For this property, it would be best to wait until you are married and you would need to wait two years after the sale of the 1989 property to take advantage of the $500,000 capital gain exclusion for a married couple.
I hope I have explained this clearly! Good luck with your home sales!
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