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Old 10-23-2016, 02:19 AM
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Sale of Home Exemption

Thank you to anyone who may be able to guide me with this question regarding the capital gains exemption of a primary residence.

I had a primary residence which I sold in 2015 for <250k profit and as I met the exemption criteria, I did claim this exemption on my 2015 taxes. In March of 2016 my fiance also sold a home for <250k in gains. She also met the appropriate criteria for this home. We were married this month (Oct 2016).

My question is, can she still take the exemption on capital gains for 2016 as we will be required to file as married for our 2016 taxes? Can we still do this married filing jointly? Filing as married filing separately would end up hitting us much harder than just paying the capital gains.

Thanks in advance for the help!



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Old 10-23-2016, 04:29 PM
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Originally Posted by acejjl2 View Post

#1;My question is, can she still take the exemption on capital gains for 2016 as we will be required to file as married for our 2016 taxes?




#2;Can we still do this married filing jointly? Filing as married filing separately would end up hitting us much harder than just paying the capital gains.

Thanks in advance for the help!
#1;
yes. it's OK if she owned the home for the past 2 years.
during the 2-year period ending on the date of the sale, neither you or your spouse excluded gain from the sale of another home. Under this couple requirement, if either spouse sold a home and used the exclusion within 2 years of the sale of any jointly owned property, the couple can't claim the exclusion. That means if your new spouse sold her house a month before the wedding, then you'll have to wait 2 years after that property's sale date before you can dispose of your shared marital residence totally tax-free.




#2;Correct as said previously; If either spouse does not satisfy all these requirements, the exclusion is figured separately for each spouse as if you were not married. This means you can each qualify for up to a $250k exclusion. For this purpose, each spouse is treated as owning the property during the period that either spouse owned the property. For joint owners who are not married, up to $250k of gain is tax free for each qualifying owner.
Choosing the right filing status will result in the lowest possible income tax; in general married couples usually file as MFJ. MFJ will give you a bigger refund or less taxes due. When you file separately, your tax rate is higher and you won't be able to claim several credits i.e., EIC or etc But Not will be required to file as MFJ for 2016 return; so married taxpayers will need to weigh the pros and cons and decide for themselves which is the best filing status.
Married couples who file jointly are entitled to a $500k exclusion from capital gains so long as either spouse owned the residence and both spouses meet the use test. If an unmarried couple bought a house and lived in it for one and a half years, and then got married, they can use that year and a half towards the two year requirement. This means they only need to live in the house as a married couple for six more months to qualify.



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Old 10-24-2016, 07:21 AM
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Originally Posted by Wnhough View Post
#1;
yes. it's OK if she owned the home for the past 2 years.
during the 2-year period ending on the date of the sale, neither you or your spouse excluded gain from the sale of another home. Under this couple requirement, if either spouse sold a home and used the exclusion within 2 years of the sale of any jointly owned property, the couple can't claim the exclusion. That means if your new spouse sold her house a month before the wedding, then you'll have to wait 2 years after that property's sale date before you can dispose of your shared marital residence totally tax-free.


.
what I mean is that you'll have to wait 2 years after that property's sale date, Mar 2016, before you can dispose of your shared marital residence totally tax-free



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Old 04-03-2017, 12:09 AM
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HI. I am not so aware of this matter.



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Old 04-03-2017, 07:45 PM
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Originally Posted by GeraldMurray View Post
HI. I am not so aware of this matter.
during the 2-year period ending on the date of the sale, neither you or your spouse excluded gain from the sale of another home. Under this couple requirement, if either spouse sold a home and used the exclusion within 2 years of the sale of any jointly owned property, the couple can't claim the exclusion. That means if your new spouse sold her house a month before the wedding, then you'll have to wait 2 years after that property's sale date before you can dispose of your shared marital residence totally tax-



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