capital gains on house, two questions

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  • #3858
    RustyShackleford
    Participant

    Two questions about the $250K/$500K exclusion of capital gains on sale of a primary residence.

    1. I am married, but acquired the house while single and it is still solely in my name (and I do not live in a community property state). Does the $500K exclusion apply ? If not, can I easily circumvent that by adding her as a co-owner before the sale ? Need I do that two years before ?

    2. I have kept meticulous records of improvements, to add to the house basis, using first hand-written notes and then an Excel spreadsheet. Is this sufficient, or must I save receipts as well ? I hope not, as many of my old receipts have faded to illegibility.

    #3859
    kaneohe
    Participant

    “Eligibility Step 2—Ownership
    Determine whether you meet the ownership requirement.
    If you owned the home for at least 24 months (2 years) out of the last 5 years leading up to the date of sale (date of the closing), you meet the ownership requirement. For a married couple filing jointly, only one spouse has to meet the ownership requirement.”

    https://www.irs.gov/publications/p523#en_US_2018_publink10008938

    This might help for a start…….but read more to be sure it makes you eligible for the 500K. I think the Worksheet I should lead you to the correct answer …….scroll & search.

    Worksheet 1. Find Your Exclusion Limit
    Use this worksheet only if no automatic disqualifications apply, and take all exceptions into account.

    A) Determine if you are eligible for the maximum exclusion limit.
    Status: Married filing jointly

    :You are eligible for the maximum exclusion if…Both spouses meet the residence and look-back requirements and one or both spouses meet the ownership requirement.

    Maximum exclusion $500,000

    If you’re not eligible for the maximum exclusion limit, then you should…Determine if either spouse is eligible for the full limit as a single person. If not, determine if either spouse is eligible for a partial exclusion.

    #3860
    kaneohe
    Participant

    2) who knows………..might depend on the chemistry between you and auditor, whether he got up on right side of bed or not, etc. and whether how much you claim is “reasonable”. Reminds me I’d better check my receipts too. Good luck!

    #3888
    RustyShackleford
    Participant

    DELETED

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