Our Team is constantly searching for timely relevant information to our clients and customers. This week we want to share tax information about selling property when there has been a death of one of the owners.
Did you know the IRS has given special consideration regarding the sale of jointly-owned principal residence after the death of a spouse? This important information is critical if the
surviving spouse does not remarry prior to the sale of the home, they may qualify to exclude up to $500,000 of gain instead of the $250,000 exclusion for single people. Here are a few details to determine if you would qualify for the IRS benefit. Of course, we want you to check with your account who is an expert on IRS issues.
- The sale needs to take place after 2008 and no more than two years after the date of death of the spouse
- Surviving spouse must not have remarried
- Both spouses must have used the home as their principal residences for two of the last five years prior to the death
- Both spouses must have owned the home for two of the last five years prior to the death
- Neither spouse may have excluded gain from the sale of another principal residence during the last two years prior to the death
If you have been widowed in the last two years and have gain in your principal residence, it would be worth investigating the possibilities. Contact your tax professional for advice about
your specific situation.