multiple primary residences

[rwsawtell]

1-11-2021

turbo tax question:

Multiple primary residences:

Can each spouse have their own separate primary residence with the tax advantages such as tax free capital gain ?  Is it required to file as MFS to do this ?

If the couplefiles as MFJ, then they must  both identify only one of the houses as their primary residence ? Correct ?

[Mike9241]

Married couples filing a joint return can exclude $500,000 of gain under the following conditions:

1)ownership - either one owns it for 2 out of 5 years before the sale

2) Use - both must use it as their primary residence for 2 out of 5 years before sale

3) frequency  - during the two-year period ending on the date of sale, neither spouse excluded gain from the sale of another home

if both spouses do not meet the use and frequency tests, the allowable exclusion is limited to the sum of the amounts that each spouse would be qualified to excluded if they had not been married

if each spouse sells a home and each spouse meets the tests above for their home, each spouse can exclude up to $250,000 of gain.  

for MFS the exclusion for each assuming all the tests are met is $250,000.