If you are married and plan to sell your home, you may be able to exclude up to $500,000 of gain from tax. The length of your marriage does not matter.
To claim the full $500,000, you need the following:
- A joint tax return for the year of the sale
- At least one spouse who owned the home for 24 of the 60 months before the sale
- Both spouses to have lived in the home as their main residence for 24 of those 60 months
- No home sale exclusion claimed by either spouse in the prior two years
If your spouse lived in the home before the wedding, that time counts. You can even marry after the closing, as long as you file jointly for that year.
If only one spouse meets the residence test, the exclusion drops to $250,000. If your spouse is a few months short, delaying the closing could save tax on up to $250,000 of gain.
A surviving spouse who has not remarried can keep the $500,000 exclusion for sales within two years of the spouse’s death.
The limits remain $250,000 and $500,000 for 2026. Congress has pending bills to raise them, but none have passed.
If you want to discuss selling your home, contact us today!