@rlwremo42 wrote:
One aspect of this I didn't mention is that my spouse is terminally ill. She is the one who wanted to buy the house. Once she passes I plan to sell it at some point (not immediately). I did come across an article on nerdwallet.com that indicated death of a family member that was an owner of the house was a qualifying factor and may result in having "some or all" of the capital gains excluded.
Obviously this will all be complex and I will need a tax advisor that specializes in estate management.
Sorry, no. There is never any special treatment on the capital gains from sale of a second home.
When you sell the home that has been your main home for at least 2 of the past 5 years, you can exclude the first $250,000 of capital gains if single or head of household and $500,000 if married filing jointly. If your spouse dies, you can still claim the full $500,000 exclusion if you sell within 2 years of their death. (After that, you are only entitled to the single $250,000 exclusion). But this only applies to your main home, not your second home.
