| Another capital gain exclusion question….read on:
READER QUESTION:
Please clarify the $250,000 vs $500,000 exclusion upon the sale of my principal residence. Do I still get the full $500,000 exclusion if my wife predeceases me?
MY RESPONSE:
Each person gets a $250,000 capital gain exclusion off the gain from the sale of their principal residence, provided it was your principal residence for 2 out of the last 5 years. Married people get $500,000. Unmarried people only get $250,000, including widows and widowers. HOWEVER, there is an exception. You may still use your deceased spouse’s $250,000 exclusion if the surviving spouse sells the house within 2 years of their deceased spouse’s death.
Even better, if the deceased spouse owned half the house at death, then you would receive a step-up in tax basis on half and still get a $500,000 exclusion if the house is sold within 2 years.
I hope this helps!
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For more information on the Capital Gains exclusion,
look through some past Listen to Lawrence Letters –
Click Right Here to Find Them!
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