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coastal
Level 2

Capital Gains on Home Sale- Marriage Requirements

If I am married after I sale my house, but both events occur in the same tax year, do we still get the $500k exclusion?  It appears we do (just confirming).
Additionally, we will meet all of the rules for the tax year of the home sale and marriage: 

I owned the home for over 2 years.

We will be Married Filing Jointly (MFJ).

Both of us have resided in the home for at least two years prior to the sale.

Neither of us previously claimed a home sale exclusion within the last two years.

 

 

1 Best answer

Accepted Solutions
SusanY1
Expert Alumni

Capital Gains on Home Sale- Marriage Requirements

Yes, you do get to take advantage of the full $500,000 exclusion when both the sale and the marriage occur in the same year, even if the wedding took place on the last day of the year. 

 

It sounds like you had quite a year! 

 

Congratulations on the move and the marriage, and best wishes for a wonderful 2020!

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2 Replies
SusanY1
Expert Alumni

Capital Gains on Home Sale- Marriage Requirements

Yes, you do get to take advantage of the full $500,000 exclusion when both the sale and the marriage occur in the same year, even if the wedding took place on the last day of the year. 

 

It sounds like you had quite a year! 

 

Congratulations on the move and the marriage, and best wishes for a wonderful 2020!

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

Opus 17
Level 15

Capital Gains on Home Sale- Marriage Requirements

Note for other readers: After the marriage, only 1 spouse has to qualify for the 2 year/5 year ownership rule, but both spouses must qualify for the "must have lived in the home as your main home for at least 2 years" rule.  The taxpayer in this case qualifies for the full exclusion because they lived in the home with the (new) spouse for at least two years (when they were not married).  If you marry and your spouse moves in with you at that time, the spouse can't use their portion of the exclusion ($250,000 per spouse) until the spouse has lived there 2 years.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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