Background. My wife and I got married in July 2020. She is a dual US/Canadian Citizen working and living in Canada since 1994 . She bought her house in 2001. Since she is a duel citizen she isn't subject to pay any Canadian Capitol Gains Tax, however, she will have to pay US Capitol Gains Tax.
Our plan is to sell the Canada house in 2021 and move back to USA and purchase a house in Arizona.
I sold my house in Washington State that I purchased in 2009 in December of 2020. That's 5 months after we got married.
We are filing our 1st joint tax return and have a a few questions on Capitol Gains Tax.
I knew we had to report and possibly pay Capitol Gains tax on the sale of the house in Washington State, however we didn't know we had to pay Capitol Gains tax to Uncle Sam until recently.
The question we have is since both houses were purchased well before we were both married and living/working in different countries is there a way we can both can qualify for the exclusion within the 2 year and or avoid the look-back requirements period all together?
If we don't qualify would paying the tax on the sale of the Bonney Lake house in December of 2020 be better and and use the $500,000 exclusion on the Canada house that will be sold in 2021 for much bigger profits?
Hope this makes sense!
Mark
