KeshaH
Expert Alumni

Deductions & credits

If only one spouse meets the "use test" (living in the home for 2 out of the last five years before the sale), you can exclude up to $250,000 of capital gain.

 

Only one spouse has to own the home, but both spouses have to live in the home for two years to qualify for the full $500,000 exclusion.

 

See Publication 523.