My fiance and I are getting married in December and are building a house set to close next spring. He owned a townhouse that he sold back in March of this year. I also own a townhouse, and we will be putting it on the market soon, hoping to sell it in December or January. So two scenarios:
Assuming my house sells by the end of the year, can we each take advantage of the capital gains exclusion if we file jointly for this year?
What if my house sells in January (and thus would go on the 2017 return)? If we exclude the sell of his townhouse for this year, would we then need to pay taxes on the proceeds of my house for 2017?
The question is 2 years old, I asked the moderators to archive the question because in retrospect, my original answer was about 30% wrong, but it's still getting helpful votes, but instead they just archived the answer.
You may both claim, up to $250,000 exclusion on a Married Filing Jointly (MFJ). There is no need to file separately. Your situation is common enough that is covered by the rules.
How do you enter this in turbo tax? I tried and it is saying one has to be a primary home and one secondary. My situation is: got married in 2017, sold both condos 2018 (both met 2/5 year prior to marriage), and bought a house in 2018. Are they both still allowed to be excluded from capital gain?