Married couple (non community property state) has a million dollar home with $100,000 basis (owned for 40 years, always used as residence). Husband dies in January. Spouse sells house in April. Lets say the FMV did not change from Jan to April and there were no expenses of sale. Spouse's basis is $550,000 due to step up and 1/2 original basis. On the joint return does the spouse get a $500,000 exclusion so no gain is taxable or just a $250,000 exclusion so $200,000 is taxable? The decedent owned and used the property for two out of 5 years as did the spouse. The question is does he have to be alive to qualify for his $250,000 exclusion?
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Residence Sale part 2
Off the top of my head, since a joint return (the last one) will be filed, The stepped up basis may not come into play, since it will be a joint return and filed in the year of death. I would think that the 500,000 would be used. -
W/out research
I would think the deceased spouse would still get the $250,000 exclusion in year of death and surviving spouse would still get stepped up basis at date of death.Comment
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