Unmarried/Gay Sellers Each Get A $250,000 Tax Break?
Is this good news for unmarried and/or gay couples? Below is a tax scenario that might be possible.
Q. We are two single women who have owned our home together and are thinking of selling. Each of us meet the two-out-of-last-five years ownership and occupancy tests of Internal Revenue Code 121, which you often discuss. When we sell our home, can we each claim up to $250,000 tax-free profits (up to $500,000 total), or do we only get one $250,000 tax exemption?
Uncle Sam likes you so much he gives each qualified single co-owner up to $250,000 tax-free principal residence sale profits. In fact, if there were three or four co-owners who each met the ownership and occupancy tests, up to $1 million total principal residence sale profits could be tax-free.
You each qualify because you are both on the title (unlike a married couple filing a joint tax return where only one spouse need hold title) and you each meet the two out of last five years ownership and occupancy tests. Please consult your tax adviser.
by
ROBERT BRUSS
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