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$500,000 Exemption

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Bongster

Junior Member
What is the name of your state?What is the name of your state? California

My husband and I were married in October 2004. I purchased my home in February 2000 and he purchased his in January 2002. We started dating in August 2002 and lived in my residence soon after. For the years 2002 and 2003, we filed separate tax returns using our respective addresses. After we were married and in February 2005, we recorded the properties to include both our names. For 2004, we will be filing a joint tax return using my address as we have been residing there since late 2002.

We are considering selling my house in 2005. May we take the $500,000 exemption on our 2005 tax return?
 


tdavidl

Member
sounds like yes. you must own & live in the home for 2 of the previous 5 years, sounds like you did. as long as one of the taxpayers on a joint return meets these requirements then you can qualify for the joint exemption of $500k. make sure neither of you has used your $250k exemption in the past 24 months though.
 

LdiJ

Senior Member
Please also remember that the 500,000 exclusion is based on gain...not the actual selling price of the home. If you paid 1 million for a house and sell it for 1.49 million there will still be no tax due because your GAIN was under 500,000.
 

Bongster

Junior Member
I've been getting conflicting answers. Some say that we're entitle to the $500,000 exemption.

However, others say that although

(1) I've owned and lived in my home for the last 5 years;
(2) neither of us claimed the tax exemption in the last 24 months; and
(3) my husband and I lived there for the last two plus years,

we're not entitled to the $500k exemption because he filed his tax return using his address. This would suggest that he was living at another address although he was residing with me.

Your opinion?
 

Snipes5

Senior Member
That would certainly "suggest" that he was using another address, but if he was actually residing with you, perhaps he has some other way to substantiate that? What address did he list with Dr's offices, place of work, etc?

Snipes
 

tdavidl

Member
the address one uses on their return has no bearing on the primary residence issue.

heck, i have clients who have grown children, do not live at home, yet still use their parents home as their mailing address.

bottom line is if you can substantiate that you adhered to the guidelines then you are entitled to the exemption.
 

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