Shantel owned and lived in a home for five years before marrying Daron. Shantel and Daron lived in the home for two years before selling it at a $700,000 gain. Shantel was the sole owner of the residence until it was sold. How much of the gain may Shantel and Daron exclude?

Question

Quizplus · Accepted Answer

Shantel owned and used the home as her primary residence for at least two out of the five years prior to the sale, making her eligible for the maximum exclusion of $500,000 ($250,000 if single). Since Daron also lived in the home as a spouse during the two-year period, he can share in the exclusion with Shantel. Therefore, they can exclude up to $500,000 of the gain from their income.

Shantel Owned and Lived in a Home for Five Years