When you sell your primary residence, you may be able to save thousands of dollars by taking advantage of one of the best available tax breaks. Provided that you have lived in the home as your primary residence and owned it for at least two of the past five years, when you sell your home, you can exclude from income up to $250,000 of gain ($500,000 exclusion even if only one spouse has owned the property for two years?
If you are married and you and your spouse file a joint return, you can exclude up to $500,000 of gain under this rules, provided that:
- Either you or your spouse has owned the home at least two of the past five years;
- Both you and your spouse have used the home as your primary residence at least two of the past five years; and
- During the two year period prior to the sale, neither you nor your spo9use excluded gain from the sale of another home.