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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121144  
Subject: Re: Home sales after marriage Date: 3/8/2000 11:41 AM
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<<OK, in the spirit of my oft-repeated assertion "You can't beat a dead horse too often," couldn't Uncle Sammy make the following claim? The married couple take the exclusion on the husband's house, fine. But a year later, when the wife's house is sold, the exclusion has already been taken and it is too soon to take it again.>>

That's what the OLD rules basically stated. Which is why it was important to sell homes prior to marriage (assuming both people were over age 55 1/2 and otherwise qualified for the "one in a lifetime" exclusion). But under the new law, the husband would not qualify (because of the prior home sale), but the wife would still qualify for a $250k exclusion...half of the married-joint exclusion.

Under the old rules, one spouse would taint the other. Uncer the new rules, the new spouse isn't tainted, but is instead relagated to using only half of the allowable exclusion. So if the gains on either home is less than $250k, there shouldn't be a problem.

<<This is what I would infer from the 4th bullet on Page 208 of the Motley Fool Investment Tax Guide 2000, a book written by TMFSelena and somebody else.>>

And I could see how you would make that reference. The heading, to which the bullets relate, have to do with the FULL $500k exclusion. Instead, read page 210 and the heading "Reduced Exclusion for Married Couples". We didn't really expand on this section, but this is really the "reduced" exclusion that I make reference to in this post. In retrospect, we should have expanded on this area of the law, but the editors thought the section was long enough as it was.

<<What I infer from Roy's #31130 is that he thinks both spouses are grandfathered as regards the $250,000 exclusion.>>

That's exactly what I think.

TMF Taxes
Roy
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