My wife and I got married in May 2020. We both owned individual houses at the time.
We sold her house in July 2020 and made a $270k profit. She had lived there as her sole residence for 10 years.
We sold my house in September 2020 and made a $60k profit. I had lived there as my sole residence for almost 4 years.
Not that it matters much, but we bought a new house for both of us to live in at the end of September 2020. We both received 1099S forms for the sale of each home.
My wife and I have always used TurboTax (prior to knowing each other), but due to it being an odd situation, we decided to sit down with a tax consultant at H&R Block. When we punched in the numbers in their software, it showed we owe no capital gains tax, despite the fact that my wife made over $250k on the sale of her home. The software looked like it was giving us a total of $500k in collective exclusions, and showing we were well below that figure (at $330k).
Am I missing something here?
I figured my home sale gains would be excluded (as it was well under $250k, only $60k), but thought we would end up paying capital gains on the last $20k of my wife's home sale (as she made $270k). I would prefer not to get audited or have our filing get rejected. Any reason why their tax software wouldn't include us paying capital gains on her home sale? Is there some tax loophole I don't know about?
