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How do I enter a sale of home for widower with a 500,000 exclusion, not 250,000 ?

TurboTax isn't processing because capital gains exceed $250,000 and filing as widower.
5 Replies
Level 15

How do I enter a sale of home for widower with a 500,000 exclusion, not 250,000 ?

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Returning Member

How do I enter a sale of home for widower with a 500,000 exclusion, not 250,000 ?

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Level 15

How do I enter a sale of home for widower with a 500,000 exclusion, not 250,000 ?

Generally, a widower is not entitled to a $500,000 exclusion. You are allowed only the $250,000 exclusion.  See TomD8's reply for the exception rules.

 

But, you are allowed a "stepped up" basis on your wife's half of the property. Using an example:

 

You bough the house for $100,000 many years ago. It was worth $400,000 when your wife died and worth $450,000 when you sold it. Your cost basis is now $50,000 (your half of the original cost) + $200,000 (the fair market value [FMV] of your wife's half, on the date of death) = $250,000**. Your capital gain, on the sale, is $450,000 minus $250,000 = $200,000.

 

**If you live in a community property state, the entire cost basis steps up, not just half. So, if your lived in  Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin, your cost basis (in the example) is $400,000 and your capital gain only $50,000.

 

Level 14

How do I enter a sale of home for widower with a 500,000 exclusion, not 250,000 ?

Under certain circumstances, a widower may qualify for the $500,000 exclusion.

 

Sale of home by surviving spouse. If your spouse died and you didn't remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home in 2018.
• The sale or exchange took place no more than 2 years after the date of death of your spouse.
• You haven't remarried.
• You and your spouse met the use test at the time of your spouse's death.
• You or your spouse met the ownership test at the time of your spouse's death.
• Neither you nor your spouse excluded gain from the sale of another home during the last 2 years.

 

See page 18 of this IRS reference:  https://www.irs.gov/pub/irs-pdf/p554.pdf

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

Level 15
Level 15

How do I enter a sale of home for widower with a 500,000 exclusion, not 250,000 ?

I tried this in a test return and TurboTax allowed the $500,000 exclusion. I suspect that you might have answered a question incorrectly. Go through the Sale of Home interview again and check your answers. Read each question carefully. The wording can be confusing. Pay particular attention to the Additional Exclusion for Widow(er)s screen.

 

If you still don't get the $500,000 exclusion, contact a TurboTax Live tax expert on Monday and go through it with the expert. The tax expert can see your tax return (with your permission) and see what's going on. We here in the community cannot see your return.

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