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I have a question on tax for capital gain on a house I have…

Hi I have a question...
Hi I have a question on tax for capital gain on a house I have owned for 20 years. It’s in a revocable trust and has been with the exception of one time I took it out for Wells Fargo mortgage. I am now selling the house and the capital gain is a killer. There’s a deduction for $250,000 for each spouse. The escrow wants to gift it to my wife which is what I want but I’m not sure it would qualify for the double deduction. The gift probably would be in the distribution of the funds. They say if they distributed beforeThe sale then I own some kind of tax per dollar value of the value of the house.The taxes that I delete that The value of the house is almost $4 million and I have need of that deduction. Will it work as escrow says. I might have to pay tax on the assessed value I don’t know why or if this is true.
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1/22/2018
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,068
Experience: 35 years tax experience, including four years at a Big 4 firm.
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PDtax
PDtax, Certified Public Accountant (CPA)
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Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
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If you took the home out and into your name for refinancing, that holding period may give you the exclusion you are looking for. Please advise.
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Dear Customer,

I am following up with the phone call.

Without any further actions, you qualify the 500,000 owner exclusion exemption from the capital gain.

According IRC Code Section 121, because you file joint return, as long as one spouse owns the house, and both satisfy the primary residency 2 years out of the past five years, you qualify for the 500,000 exclusion exemption. The law requires only one spouse owns the property.

See the law section quoted below.

Please feel free to follow up.

Regards,

Fiona Chen, MPA, Ph.D., CPA, ABV, CFF, CITP, IMTA

26 U.S. Code § 121 - Exclusion of gain from sale of principal residence

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(a) Exclusion

Gross income shall not include gain from the sale or exchange of property if, during the 5-year period ending on the date of the sale or exchange, such property has been owned and used by the taxpayer as the taxpayer’s principal residence for periods aggregating 2 years or more.

(b) Limitations

(1) In general

The amount of gain excluded from gross income under subsection (a) with respect to any sale or exchange shall not exceed $250,000.

(2) Special rules for joint returnsIn the case of a husband and wife who make a joint return for the taxable year of the sale or exchange of the property—

(A) $500,000 Limitation for certain joint returnsParagraph (1) shall be applied by substituting “$500,000” for “$250,000” if—

(i)

either spouse meets the ownership requirements of subsection (a) with respect to such property;

(ii)

both spouses meet the use requirements of subsection (a) with respect to such property; and

(iii)

neither spouse is ineligible for the benefits of subsection (a) with respect to such property by reason of paragraph (3).

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