@rockstoclimb wrote:
Thank you so much for the detailed and comprehensive answer!
You stated:
“… there are special rules if two people marry and then sell homes they previously owned individually. But that does not apply here…”
why doesn’t that apply here? I owned my home individually, we got married, I sold it. Is it because my husband did not ALSO sell a home that he owned independently after we were married?
Yes, if your spouse had owned a home and sold it after the marriage, where you did not meet the residency rule, he would be able to claim his individual $250,000 exclusion. However, because this is a joint marital home, I don't see any wiggle room that would allow him to claim an individual exclusion on a joint return. (As I explained, he could claim an individual exclusion on half the gain if you filed separate returns, but that has drawbacks and should be carefully evaluated.)
