Hello bucc,

In order to claim the exclusion on the sale of your primary residence, normally two rules must be met:

1. You must have owned the home for at least 2 years and,
2. You must have lived in the home for at least 2 of the previous 5 years.

The amount excludable as gain is $500K for individuals filing jointly if: (1) either spouse meets the ownership test and (2) both spouses meet the use test, and (3) neither spouse is ineligible for exclusion by virtue of a sale or exchange of residence within the prior two years.

So as long as one of you has owned this home for at least 2 years, and you have both lived there for 2 of the last 5 years, and neither of you have already claimed an exclusion on a sale in the previous 2 years -- then there is no need for you to add the other name to the deed. You would still qualify to claim the $500,000 deduction.

http://www.explorerealestate.net/253717.html


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Thank you bucc

Hello again bucc,

Thank you for the additional information.

That being the case, you would have to add your partners name to the deed, however, even after doing so, you could not sell the home for at least two years in order for your partner to meet the two year ownership requirement. Once that was met, then as long as you also both lived in the home for 2 of the previous 5 years, you could each claim an exclusion of $250,000 on your share of the sale which would be split 50/50.

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Thank you bucc

Hello again bucc,

You can actually do that on your own by simply completing a Quit Claim Deed form. Quit Claim Deeds can be obtained from most office supply stores such as Office Depot or Office Max. It is a relatively simple form that states that Party A is adding Party B as a joint owner, etc etc. The packet you buy for the form will have instructions and a sample of how to fill out the form.

Once the form is complete you both need to sign it and have it notarized. You then take that to your county Recorder of Deeds office to have it filed. There is usually a filing fee of around $10 or $20, but this will be the extent of your expense if you just handle it this way on your own.

Otherwise you could have a title company complete this for you, but they would end up doing the exact same thing and probably charging you a few hundred dollars.

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Thank you bucc.