Agent

Will owner’s marriage double home-sale tax exemption?

New spouse's principal residence status plays key role

DEAR BOB: I read your recent response to that reader saying a married couple can qualify for the full $500,000 principal residence sale tax exemption even if only one spouse held title. My mother is soon going to sell her house where she has lived for 23 years. She is getting married this month. If she sells her house after the wedding, can she qualify for the full $500,000 tax break? Her Realtor says that because her new husband never lived in the house, she only qualifies for $250,000 tax-free. Is he right? – Stephanie R. DEAR STEPHANIE: The Realtor is correct. Internal Revenue Code 121 only requires one spouse's name to be on the title of the principal residence being sold to claim the full $500,000 exemption (instead of just $250,000 for a single home seller). But both spouses must meet the two-out-of-last-five-years occupancy test. Purchase Bob Bruss reports online. Since your mother qualifies but her new spouse hasn't lived in the principal residence an "aggregate" two ...