Agent

Ex-husband lays claim to $250,000 home-sale exemption

Why moving out of home does not affect eligibility
Published on Jan 26, 2006

DEAR BOB: In 1989, my wife and I bought our family home together. In 1998, we separated. I moved into an apartment and she stayed in the house. We divorced in 2003. I agreed to receive a $100,000 lump sum payment when our house is sold. In June 2005 we sold the house and at the closing I received $100,000. Am I still entitled to my tax exemption on the $100,000? --Joe C. DEAR JOE: Yes. If I understand your e-mail correctly, at the time of the home sale your ex-wife was still living in the family home as her principal residence. Purchase Bob Bruss reports online. Presuming she qualifies for the Internal Revenue Code 121 principal residence sale $250,000 capital gain tax exemption, by owning and living in the home at least 24 of the 60 months before its sale, then you also qualify for up to $250,000 tax-free profits. In tax talk, she is referred to as the "in spouse" and you are referred to as the "out spouse." But the tax result is you and your ex-wife are each entitled to up to $250,...

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