@mack12345 wrote:
Opus17. You've been so helpful. I'm clear now on my cost basis. Thank you. The home I sold has been owned by me for many years. I married in March 2021; sold in Oct 2021. So my home was acquired by me before marriage. We do live in California. My spouse does not meet ownership or use requirement of the home I sold (he is not on deed) for capital gains exclusion. I meet it for the 250,000. Can we file married filing separately in California? Any special considerations? Are there any special rules for me regarding the 1099 and taking the 250,000 exclusion I qualify for on my MFS taxes. Does he have to record anything about the sale on his return? I appreciate your expertise
Marriage imparts ownership, so that is not an issue. If your spouse lived in the home for 2 years as their main home (more than 730 days), even if you were not married, they can claim their portion of the exclusion.
Filing separately will almost always cause you to pay more tax, and it is especially complicated in a community property state like California. There is no reason not to file jointly, you should be able to just claim your exclusion (Turbotax should ask if you and your spouse qualify separately. It should not give you the $500K automatically.)
