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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16559
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I have been married for 15 years. UP until 3 months ago, my

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I have been married for 15 years. UP until 3 months ago, my wife and I maintained separate houses (it's a long story, but it worked for us). Now I have moved into my wife's house and am selling my house. If it matters, I purchased my house before I got married.
Since my wife's house was more valuable than mine, we had the family homestead exemption on it, since apparently in Texas a couple can only have one exemption, even if they live separately.

My CPA opines that since the homestead exemption was on her house, and we are selling mine, that I will have to pay capital gains tax on the sale of my house. I'm hoping he's wrong....what do you think?

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

How are you today?

MyVirtualCPA :

It is my opinion that you do not have to pay the capital gains tax, provided the tax is below $250,000

MyVirtualCPA :

You would only be able to avoid tax on your $250,000 not the marital $500,000 because your wife did not live there and it was not her personal residence

MyVirtualCPA :

The homestead exemption only deals with your real estate property taxes

MyVirtualCPA :

For federal tax purposes, a home is your primary residence if you live in it for 2 out of the last 5 years

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