My husband and I each own property. I am selling my home and moving into his. We want to use the proceeds from my home to make improvements to his. He wants to add me to the deed to his property. How do we avoid either of us getting hit with capital gains taxes, if that is even possible?
You don't need to worry about capital gains reporting. This amount of gain on the sale of a primary residence is still excluded from income. If you stay in your husband's home for a qualifying period of time, you may exclude the gain on the sale of that residence as well. Please see this FAQ with more information on this tax provision: https://ttlc.intuit.com/replies/3300213
Feel free to make the improvements, and if you can live in the home for two more years (although hopefully it is for many more if it is a good home), you'll be able to exclude the gain on that home as well when it sells.
Did you live in the home for at least 2 of the last 5 years and had no more than 250,000 of gain on your sale, being your primary residence? Or has it been a rental or some other similar situation?
Yes I lived in the house for the past 7 years as my primary residence and the gain is less than $250000. We will be renting to the buyer for a month prior to closing, but it’s not an investment property.
You don't need to worry about capital gains reporting. This amount of gain on the sale of a primary residence is still excluded from income. If you stay in your husband's home for a qualifying period of time, you may exclude the gain on the sale of that residence as well. Please see this FAQ with more information on this tax provision: https://ttlc.intuit.com/replies/3300213
Feel free to make the improvements, and if you can live in the home for two more years (although hopefully it is for many more if it is a good home), you'll be able to exclude the gain on that home as well when it sells.
Thank you very much-this was very helpful and great to get such a quick answer!