1997 Tax Act Q & A

QUESTION:
I already sold my home. I owned it and lived there for many years. If I get married before year end, do I get to exclude $250,000 or $500,000?

ANSWER:
The $500,000 exclusion applies to people who file joint returns. Eligibility for a joint return is based on marital status on 12/31.

For a couple to qualify for the $500,000 amount, it is OK for only 1 to own the home, but both must have used it as their principal residence for 2 years. So if you have been shacked up for a couple of years, you get the $500,000 benefit.

But be careful how you propose. "I'll save $40,000 if we get married" is not very romantic!

For more information, see 1997 Tax Act
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