Client bought a house in 2014 for $275,000. Divorced that wife and kept house and refinanced it into his name only. 1/1/2020 he gets remarried. New spouse lives with him but not on the deed. Just sold February 2022 for $875,000 in his name only. How is this handled? Does he only get to exclude $250K? or get $500K exclusion?
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If the new wife used the home as her Principal Residence for two years and has not excluded another home in the last two years, they can exclude $500,000. It does not matter that she is not on the deed. -
One of you meets the ownership test.
you and your spouse meet the use test during the 2-year period ending on the date of the sale.
Also refer to TTB 6-22Last edited by TAXNJ; 05-11-2022, 07:29 PM.Always cite your source for support to defend your opinionComment
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