2 Yr Exclusion Question
Question:
If I am married, is it possible for my husband and I to purchase separate properties and declare that he is primarily residing in his while I am primarily residing in mine and each be eligible for up to $250K in capital gains? Or does being married force us to call one home our primary residence for up to a $500K exclusion?
You can have 2 separate primary residences, and will be eligible for 2 x $250,000 exclusion.
In case of an audit you will have to prove that you, indeed, resided there separately (most of the time during an year, for 2 years in the last 5 yrs, check section 121 IRC) .... or ask your tax advisor [ Edited by kittiwulfi on Date 10/11/2005 ]