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My mother is a widow - spouse died 11/19/22. Sold her house on 8/15/23 with capital gains of $350,000. She should qualify for $500,000 capital gains exclusion, correct?

No deductions for office etc on the home and no other homes have been sold using the exclusion.
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2 Replies
KrisD15
Expert Alumni

My mother is a widow - spouse died 11/19/22. Sold her house on 8/15/23 with capital gains of $350,000. She should qualify for $500,000 capital gains exclusion, correct?

Yes.

 

According to the IRS:

“Also, you may be able to increase your exclusion amount from $250,000 to $500,000. You may take the higher exclusion if you meet all of the following conditions.

  1. You sell your home within 2 years of the death of your spouse;
  2. You haven’t remarried at the time of the sale;
  3. Neither you nor your late spouse took the exclusion on another home sold less than 2 years before the date of the current home sale; and
  4. You meet the 2-year ownership and residence requirements (including your late spouse's times of ownership and residence, if applicable).”
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My mother is a widow - spouse died 11/19/22. Sold her house on 8/15/23 with capital gains of $350,000. She should qualify for $500,000 capital gains exclusion, correct?

I thought that was correct from reading the IRS documentation as well, but Turbo Tax said she wasn't eligible for the exclusion which seems to be a defect.  It wasn't even going to allow a $250,000 exclusion!  I went to the HomeSalesWks form and clicked "Y" to part II  question 9, which asks, "Do you wish to use the available main home sales excl. for sales after 5/6/1997?"  and then she was eligible for the exclusion.  Somehow the "EasyStep" method in Turbo Tax is not selecting that even though I am certain that I put in all of the correct information.  I don't know how to report this, so I'm commenting here.

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