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Updated about 1 year ago,
Gains exclusion on separately owned residence post-marriage
Hello all! I have read through the IRS documents in this subject and can’t come to a clear consensus. Here’s the situation: I and my spouse got married in our thirties and both owned a residence. We got married December 2022, never co-habitated, and I moved in to his house in January of 2023 and we rented my property. We filed our taxes jointly that year, if it matters. June of 2023 we sold his house, which remained exclusively in his name (as mine has remained exclusively in my name). I’m trying to determine if the full gain of the property can be excluded from tax, because I did not live in the home for a full two years? He well exceeds both the use and ownership requirements. Do we need to file separately so her can plain the exclusion? Or does my moving in to the house for 6 months just mean we’ll have to suck it up and pay taxes on some prorated portion of the gains? Or does the “unforeseen circumstances” clause cover a situation like a marriage and move to a larger home?