homested exemption and sell of a home

HELP! What is the name of your state? Florida We have a home together for 12 years and are not married but both of our names are on the deed. Right now we are building a home with the home equity line on our old house. To claim homestead exemption on the new house one of us needs to move there and remove our name of the old deed and have it on the new one right? Okay after the sell of the old house the one that no longer lives there and the name is no longer on the deed is he entitled to the 250k profit and the 2 years of living there within 60 months when his name was still on the deed at the time?

[Paddy Reagan]

If you owned the house jointly and filed separate returns each of you can exclude up to $250,000 from the profit on the sale. This, of course, assumes that you lived there for two of the last five years.

Where things may get complicated for you is if you keep the old house and the new. There's a two year limit to how soon you can claim the exclusion again so, if, in a year, you decide to sell the old property, you both should be able to claim your $250,000. However, if you sell the new house within two years after the sale of the old, you probably won't be able to exclude any of the profit unless your decision to sell was based on a job related move. (Reading this will demonstrate why you need to consult a tax professional.)

To read more on this great but complicated tax issue, go to the IRS web site and read Publication 523.

what as I said above that his name is no longer on the deed to the old house because he went to live in the new house for homestead exeption. Would he still be entitled to the 2 years 60 months because he did live in the old but his name was removed off the deed?

[Gadfly]

Stop trying to scam the system and force the rest of us here to pay for your living in sin. Get married and deal with it.

Scam the system what ever, if I was doing that I be in a house 2 years and sell and repeat. We've been there 12 years and he decided to build another home and he is entitled to his profit we both have shared equally in the home. How is that a scam? I was seeking the right way to proceed with what was going on. What does being married have to do with it either? We pay our share of taxes and property taxes of over 10 K. Sounds like you need to get a life!

[efflandt]

I do not understand why you need to take his name off of the old deed. As long as he lived in it for at least 2 of the 5 years before it is sold, you both should be able to claim the $250k captital gains exemption on each share of the sale.

There is no reason he cannot claim a homestead exemption on the new home if he lives them, but that might affect your ability to claim homestead exemption on the shared old home (which would then become a 2nd home for him). There might not be any advantage to that until the new home is completed and assessed at full value (instead of empty lot).

If you take his name off of the old deed (depending upon what you pay him for that) there may be refinance requirements, a requirement to file a gift tax form, and/or you may be subject to more capital gains tax when you sell the old home, especially if he gifts you his half.

So you need to figure out which way you will come out ahead in the end "legally", which no one here can do with the limited info you provided.