Extra Tax Benefits for a Surviving Spouse that needs to Sell a Home

tax benefits for a surviving spouseThe IRS makes a special consideration for the sale of jointly-owned main home after the passing of a spouse. The surviving spouse can qualify to exclude up to $500,000 of capital gains if specific requirements (listed below) are met compared to only $250,000 exclusion for single people.

  • Selling the home needs to happen within two years after the death date of the spouse.
  • The surviving spouse must not be remarried on the sale date.
  • Prior to death of the spouse, the home must have been the principal residence for two of the last five years.
  • For two of the last five years prior to the death the home must have been owned.
  • The surviving spouse can count any time when the passed spouse owned the home as time they owned it and any time the home was the spouse’s residence as time when it was their residence.
  • Neither spouse may have excluded gain from the sale of another principal residence during the last two years prior to the death.

It might be worth investigating your possibilities if you have been widowed in the last two years and have considerably equity in your principal residence. We suggest you contact a tax professional for advice regarding your situation. Contact me to find out what your home is worth in today’s market. For more information on this topic you can refer to IRS Publication 523 – surviving spouse.

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