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| | {{ForumReplyPost|UserID=Solomon|Date=28 November 2005|Text=The five year ownership rule has to do only if the home was acquired in a like kind exchange. Living in it two years still applies with a like kind exchange.}} | | {{ForumReplyPost|UserID=Solomon|Date=28 November 2005|Text=The five year ownership rule has to do only if the home was acquired in a like kind exchange. Living in it two years still applies with a like kind exchange.}} |
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| | + | {{ForumReplyPost|UserID=Anuenue|Date=4 December 2005|Text=If it was jointly owned and the husband lived in the house two of the last five years before it was sold the wife has until the third anniversary of the husband's death to sell the house and take the $500,000. deduction. |
| | + | Anuenue}} |
Revision as of 22:10, 4 December 2005
Discussion Forum Index --> Tax Questions --> Sale of principal residence
Maga (talk|edits) said:
| 15 November 2005
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| Husband and wife own and lived in their principle residence for the last four years. Husband passed away this year. If the wife sale the house next year is she still entitled for $500,000 exclusion under IRS section 121? Or she has to sell it this year (the year that husband died).
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Budrok@Aol.com (talk|edits) said:
| 16 November 2005
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| Must be able to file Joint with deceased spouse (meaning the year he died has to be sold
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Snooks (talk|edits) said:
| 17 November 2005
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| Be careful, wasn't there a law change that requires 5 year ownership? I am pretty sure that was just covered in the tax seminar I attended.
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Snooks (talk|edits) said:
| 18 November 2005
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| Just wanted to follow up, this issue has came up twice for me in the last two days. In looking at 2005 Publication 523, page 9 there is an ownership and use test that must be met. Unlike what I thought they said in the tax seminars, it appears possible to exclude some gain and yet not own the home for all of the 5 years. Take a look at the mentioned Publication 523. I am still reviewing notes from the tax seminar to see where I got the idea that 5 year ownership was now a must. Maybe in was in discussing proposed changes.
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Snooks (talk|edits) said:
| 19 November 2005
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| Thanks, I understand the rules that were in place a year ago. I simply thought I heard mentioned of a change, but have been unable to find it.
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DZCPA (talk|edits) said:
| 22 November 2005
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| Don't forget to step up the basis at time of sale.
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Sheldon (talk|edits) said:
| 28 November 2005
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| I think DZCPA may have hit the nail on the head. The house is jointly owned, so in effect is divided in half. The husband's half should have little, if any gain upon sale (appreciation since death only). If the wife's half of the house has over $250,000 of gain then there would be tax to pay on that half. But would agree that in the year of death, a taxpayer would be able to also get the full $500,000 exclusion on a jointly filed tax return in addition to the step up in basis on the husbuand's half of the house. It seems a little unfair, as it would be impossible with deaths near year end.
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Solomon (talk|edits) said:
| 28 November 2005
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| The five year ownership rule has to do only if the home was acquired in a like kind exchange. Living in it two years still applies with a like kind exchange.
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Anuenue (talk|edits) said:
| 4 December 2005
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| If it was jointly owned and the husband lived in the house two of the last five years before it was sold the wife has until the third anniversary of the husband's death to sell the house and take the $500,000. deduction.
Anuenue
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