Sale by Surviving Spouse
The loss of a spouse is not something we like to contemplate, but if we are home owners, such a sad event can complicate our home ownership. The IRS has given special consideration regarding the sale of a jointly-owned principal residence after the death of a spouse. 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.
- 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. Contact me to find out what your home is worth in today’s market. See IRS Publication 523 – surviving spouse.