Becky bought a home with her husband, Ken, in 2003 for $125,000. They were divorced in 2012 and Becky became sole owner of the home under the divorce decree. On January 5, 2016, Becky married Michael. Michael and Becky have been living in the house since their marriage but they are planning now to move. If Michael and Becky sell their home on December 15, 2017 for $500,000, how much taxable gain must they report on their 2017 joint tax return?

Question

Quizplus · Accepted Answer

($500,000 - $125,000 - $250,000 exclusion = $125,000). Only Becky qualifies for the exclusion because Michael has not lived in the home for at least two years.

Becky Bought a Home with Her Husband, Ken, in 2003