If you or anyone you know may have lost their spouse recently, did you know you have 2 years to still be eligible for the $500K Tax Free Home Sale?
This could be a huge savings for you or someone you know if they sell the home within 2 years of the death of the spouse. I have included some links for you as well as an IRS download.
An eligible unmarried individual can exclude from federal income taxation up to $250,000 of gain from selling a principal residence. Married joint filers can exclude up to $500,000. However, you, as the surviving spouse, are not allowed to file a joint return for years after the year during which your spouse died (unless you remarry). Even so, an unmarried surviving spouse is allowed to claim the larger $500,000 joint-filer gain exclusion for a principal residence sale that occurs within two years after the spouse’s death. This is a beneficial rule, but mind the deadline. Since the two-year period begins on the date of your spouse’s death, a sale that occurs in the second calendar year following the year of death but more than 24 months after the date of death will not qualify for the larger $500,000 joint-filer gain exclusion. On the other hand, if you sell during the calendar year after the year of your spouse’s death, you will automatically be within the two-year period.
Of course, being eligible for the larger joint-filer gain exclusion won’t matter if the gain from selling your home is $250,000 or less. That’s certainly possible even with a highly appreciated home, because the basis of any portion of the home inherited from your deceased spouse will be stepped up. And if the home was owned as community property, the basis of the entire home will be stepped up, as explained earlier.
As ALWAYS – please check with your Accountant and Financial Advisor to make sure you qualify. We are not Accountants or Financial Advisors and your specific circumstances may be different.
If you are on the market to sell your home and sell it on time to qualify for the above, give us a call today. We will help make the process as stress-free as we can and help you get maximize the value of your home with Experience, Personal Approach and Leading Edge Technology. Call Tim and Ayda Walsh today