Currently single but getting married June 1, 2023. I will sell my home in CO. (only in my name) and purchase a new home in TN. Do I sell before or after I am married?

[eamehas]

The new home will be purchased with cash from the sell of my current home. Should I worry about a capital gains hit?

[xmasbaby0]

SALE OF HOUSE

If your gain was more than  $250,000 filing Single, or more than $500,000 filing Married Filing Jointly the sale must be reported on your tax return.  Whether you re-invested the gain in to another house is irrelevant.  If you  have a Form 1099-S go to Federal>Wages and Income>Less Common Income>Sale of Home (gain or loss)

If you owned and lived in the home as your primary residence for at least 2 of the last 5 years on the date of the sale, you do not have to report the home sale if the gain is less than $250K filing Single, or less than $500K filing Married Filing Jointly (and you both owned and lived in the home for at least 2 years).

• If you are using online TT, you need Premier or Self-Employed software to report the 1099-S

[eamehas]

Does it matter the date of marriage vs the date of home sale? Home is listed for $515k but still owe $190k does that mean the gain is less than 500k? 

[xmasbaby0]

Does your fiance also live in the home?  Has he/she been there for two out of the last five years?   The exclusion is affected by that, even if you marry before you sell the house.

[VolvoGirl]

For the gain.  The mortgage balance doesn't figure into it.  Your gain or loss is simply the Sales price minus your purchase price plus improvements.  So how much did you buy it for?

[eamehas]

Yes he has lived in the home since 2019. What proof will we need to provide? He is not listed as owner of the home I will sell. Also is the gain what we take home or what the house sells for? We still owe about 190k but will sell for around 500k

[eamehas]

I bought for 180k we have put in about 30k and will hopefully sell for 515k-500k

[JohnB5677]

The IRS will not normally look for his occupancy of the home, but his driver's license and where he gets his mail would be a good start.

The gain is basically what the house sells for less what you paid for it plus improvements.

In your case $500 K - ($180 K + 30 K) = Gain of $290,000

What you owe for a mortgage does not come into play for tax purposes.

If you have a capital gain from the sale of your Primary Residence, you may qualify to exclude up to $250,000 of that gain from your income if single, or up to $500,000 of that gain if you file a joint return with your spouse. 

In general, to qualify for the exclusion, you must meet both the ownership test and the use test. 

• You're eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale. 
• You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale. 
• Generally, you're not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home. 
• Refer to Publication 523 for the complete eligibility requirements, limitations on the exclusion amount, and exceptions to the two-year rule.

If you receive an informational income-reporting document such as Form 1099-S, Proceeds From Real Estate Transactions, you must report the sale of the home even if the gain from the sale is excludable. 

Additionally, you must report the sale of the home if you can't exclude all of your capital gain from income. 

IRS Topic - Sale of Home