A taxpayer can exclude up to $250,000 if single and $500,000 if you file a joint return, of the gain from the sale of your principal residence if you lived in it for at least two of the five years before the sale.
If you're married and want to use the $500,000 exclusion:
- You must file a joint return.
- At least one spouse must meet the ownership requirement (owned the home for at least two years during the five years prior to the sale date).
- Both you and your spouse must have lived in the house for two of the five years leading up to the sale.
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