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x_m_z
Level 3

can I claim principal residence exemption for no green card spouse?

My girlfriend/wife (we got married in 2020) and I lived in our current principle house for more than 4 years. My wife has no green card and her green card application is still in process.

We filed 2020 tax as married filing jointly tax. Before 2020, we filed tax separately.

My wife's name was added to house title last year.

If we sell the house this year or next year, can we claim the $500,000 principal residence exemption?

 

Thank you.

 

 

 

 

1 Best answer

Accepted Solutions
Mike9241
Level 15

can I claim principal residence exemption for no green card spouse?

there is no requirement that your spouse/girlfriend be a US resident in order to meet the 2 out of 5 year use test. the two years that she used the house can be any period within the five years before the sale. the fact she wasn't married to you for the two years is irrelevant. on a joint return there is a $500K exclusion because both use and ownership tests are met  - $250K for each of you. not $500K each. there is a requirement that she have an ITIN but not a green card.

 

 

 

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4 Replies
Critter-3
Level 15

can I claim principal residence exemption for no green card spouse?

There are certain additional requirements you must meet to qualify for the $500,000 exclusion. Namely, you must be able to show that all of the following are true:

  • you are married and file a joint return for the year
  • either you or your spouse meets the ownership test
  • both you and your spouse meet the use test, and
  • during the 2-year period ending on the date of the sale, neither you or your spouse excluded gain from the sale of another home.

What happens if two married taxpayers file a joint return and one of the taxpayers (but not both) excluded a gain on the sale of a home within the last two years? In that case, the joint filing couple may still exclude gain from a home sale from their gross income, but only up to the $250,000 limit for single taxpayers. 

x_m_z
Level 3

can I claim principal residence exemption for no green card spouse?

Thanks for reply. Unfortunately, it did not help my original questions.

 

 I am still looking for help for my questions:

 

1. Before our marriage, my girlfriend (now my wife) lived in my house (I owned) for three years, after marriage, my wife lived in the house for one year. Does that three years (my wife lived as my girlfriend before the marriage) can be counted for the purpose of the at least of two years resident requirement?

 

2. Although we file the joint return for 2020, but my wife does not have the green card and still in applying process, can we both claim the $500,000 principal residence exemption even my wife does not have the green card yet?

 

Thank you.

Mike9241
Level 15

can I claim principal residence exemption for no green card spouse?

there is no requirement that your spouse/girlfriend be a US resident in order to meet the 2 out of 5 year use test. the two years that she used the house can be any period within the five years before the sale. the fact she wasn't married to you for the two years is irrelevant. on a joint return there is a $500K exclusion because both use and ownership tests are met  - $250K for each of you. not $500K each. there is a requirement that she have an ITIN but not a green card.

 

 

 

x_m_z
Level 3

can I claim principal residence exemption for no green card spouse?

Thank you for your help !

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