Discussion:Two primary residence?
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Discussion Forum Index --> Tax Questions --> Two primary residence?
| February 22, 2006 | |
| My client and her husband have not lived together for 10 years (I know-why are they married? I dunno) They live about 3 hours driving time apart. They have (they think) established separate primary residences. Each has voted, registered cars, worked nearby, etc. for each house separately. Now, of course, one house is sold and they want to exclude the gain (which would only be about 50,000.) from tax based on the husband selling his primary residence. If its not excludable, then there would be capital gains tax on it. So what do you think, excludable or not? any references? It kinda reminds me of a newly married couple who both meet the 2 year test and one sells their former home and excludes 250,000. | |
Taxea@hawaii.rr.com (talk|edits) said: | 23 February 2006 |
| Not..Have they filed separately all these years? I don't see how they could claim special circumstances of any kind, each having established their own primary residence.
He should have moved her back in for two years. | |
| 23 February 2006 | |
| If they file a joint return, 100% of the gain would be excludible under Sec. 121(b)(2)(B). If they file separately and assuming the home is owned jointly, 50% of the gain would be excludible on the husband's return under Sec. 121(b)(1). | |
| February 24, 2006 | |
| They have filed separately for all the time. And they will probably file separately for 2005. The home is owned jointly. But reading Pub 523 and Sec. 121 gives me the impression that he should be able to exclude his gain, up to 250,000. He meets the ownership and use tests (Pub 523 has lots of factors) and he's not sold any other house in 2 years. So I think we're OK with it. | |
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