You may qualify for either $500,000 or $250,000, based on who lived in the home as a primary residence. The IRS looks at how the home was used, not just who owns it or your marital status. Since you ...
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You may qualify for either $500,000 or $250,000, based on who lived in the home as a primary residence. The IRS looks at how the home was used, not just who owns it or your marital status. Since you and your spouse are separated but still filing jointly, the main thing to check is whether both of you meet the use test for the home that was sold. Here are some things to consider.
The IRS explains that for a joint return, either spouse may meet the ownership test, but both must meet the use test individually to qualify for the full $500,000 exclusion. if only one spouse meets the use test, the couple filing jointly may exclude only that spouse’s $250,000 limit.
IRS Topic no. 701, Sale of your home