Getting conflicting answers about tax exemptions selling my house

[Ian Russell]

So I am trying to see if anyone know the answer to this question.    I am selling my house in San Jose in which I lived in for 5 years.  I moved out last year and rented it out for the whole year.  I bought the house in 2012 for 388,000 dollars and will sell it for around 800,000 to 850,000.  I know that as a single person you get an exemption of 250,000 dollars.  I got married last year and will file a joint tax return with my wife.  Do we now get the 500,000 dollar tax exemption since we are married?  I am the only one on title.    My tax accountant said that we would get the 500,000 dollar exemption but my real estate agents tax person says that this is not the case since my wife did not help buy the house.  Hopefully someone knows the answer to this. 

thanks

Ian

[Dave Toelkes]

@Ian Russell.

Unfortunately, you are getting conflicting answers here, too.  

Your tax acccountant is wrong.  Your RE agent's tax person is right but for the wrong reason.

For a married couple filing jointly to get the $500K capital gains exclusion on the sale of a primary residence, only one needs to be on title for 2 of the 5 years prior to sale, but both must have occupied the property as their primary residence for 2 of the 5 years prior to sale.

Since your wife does not meet the occupancy test, your capital gains tax exclusion is limited to $250K if you sell now.  

If you don't sell now but you and your wife move back into your former house for two more years before you sell, you establish eligibility for the full $500K capital gains exclusion.