Sale of 2nd home when married filing separately?

[ssaasshhaa]

I bought a home before I was married that I intended to fix up and live in, but instead I fixed it up over 2+ years and then sold it. It was never my primary residence.

I got married during those two years, and my income is much less than my husband's. I'm wondering if I can minimize the capital gains tax on what I made from the home if we file "married filing separately," and I'm the only one who reports the sale of the home on my taxes. The house was in my name only.

[MonikaK1]

It depends. If you live in a community property state, and you used commingled funds to fix up the property and make mortgage payments, the property could be considered to belong to both you and your spouse. Depending on other factors, it may still be better to file jointly.

You can use TurboTax Online to test different scenarios before deciding to file jointly or separately. Click here for more information.

Click here for tax tips for community property states.

[ssaasshhaa]

Thank you!

[MonikaK1]

You're welcome!