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Home Sale Exclusion for 2 homes within 2 years

My wife and I were married in late 2021. We both owned primary residences where we both lived for more than 2 years. We are now selling our homes as we found a new home to live in. These properties were not shared between us however we are now filing joint tax returns.
 
Husband primary residence property was sold in 2023.
Wife primary residence property to be sold in 2024. 
 
The home sale exclusion of 250k/500k single/jointly comes into play here and here is what we need to know. 
 
Husband would like to take the 250k gain exclusion for his property in tax year 2023 and wife would then take a 250k gain exclusion on 2024 tax. 
 
Is this possible to do? If so, does it require a different filing status than Married filing jointly?
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1 Reply
PatriciaV
Employee Tax Expert

Home Sale Exclusion for 2 homes within 2 years

Yes, to receive the maximum gain exclusion, your best option is to file separately this year and next. The result would be the same if you each had sold your homes before marrying.

 

Taxpayers filing a joint return may exclude up to $500,000 gain on the sale of a former residence. If filing separately, each spouse may exclude up $250,000 gain on the separately stated return. If one spouse excludes less than $250,000, the difference cannot be applied to the other spouse's return.

 

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