Jerry bought his home 15 years ago for $60,000.Three years ago Jerry married Debbie and she moved into the same house and has lived there since.If they sell Jerry's house in December,2013 for $340,000,what is their taxable gain on a joint tax return?

Question

Quizplus · Accepted Answer

Jerry and Debbie can exclude up to $500,000 of gain on the sale of their primary residence if they file a joint tax return and meet the ownership and use tests. Jerry owned and lived in the house for at least 2 of the last 5 years, and Debbie has lived there for at least 2 years. Therefore, their gain of $280,000 ($340,000 - $60,000) is fully excluded, resulting in a taxable gain of $0.

Jerry Bought His Home 15 Years Ago for $60,000