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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15720
Experience:  15years with H & R Block. Divisional leader, Instructor
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My husband purchased a property in 2000, prior to our

Customer Question

My husband purchased a property in 2000, prior to our marriage. The deed was solely on his name. He sold the house in January 2015, and the net gain was under $250K. In June 2013, we purchased a house in jointly ownership. Both of our names are ***** ***** Deed, if we decide to sell the house this year, can we qualify for the tax exemption, given that the net gain on the house is also under $250K, and we meet the 2 years residents in the house?
Can we assume that the first property was under my husband tax filing (he met 2 years living in the resident within the last 5 years) and the tax exemption is under $250K, and on the second property is under my benefit of tax exemption of $250K?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.


Section 121 provides that, under certain circumstances, gross income does not include gain realized on the sale or exchange of property that was owned and used by a taxpayer as the taxpayer's principal residence. Subject to the other provisions of section 121, a taxpayer may exclude gain only if, during the 5-year period ending on the date of the sale or exchange, the taxpayer owned and used the property as the taxpayer's principal residence for periods aggregating 2 years or more.

So, you must use and own the property for 2 full years to exclude gain. The house is owned by both of you so you both would have to report the sale.

Your husband could not use the exclusion because he used it in 2015 and he can only use it every 2 years.

You could use your $250,000 but only on your half of the gain.