Level 7

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Home sale

Forum|Forum|15 days ago
June 17, 2026
4 replies
63 views

Taxpayer owned Home #1 for 26 years before getting married.

Taxpayer married in 2012.

Taxpayer and spouse purchased Home #2 together in 2017.

Spouse passed away in 2020.

Taxpayer never sold Home #1.

Home #2 was a large marital residence. After the spouse's death, the taxpayer never rented it out. The taxpayer continued paying all property taxes, insurance, maintenance, and other upkeep expenses. Personal belongings remained in the home.

Because of the grief associated with the loss, the taxpayer did not consistently live in Home #2 and instead spent time going back and forth between both properties. The two homes are only about 2.5 miles apart.

In 2026, the taxpayer sold Home #2. Based on the tax return calculations, the sale results in approximately $55,000 of tax due if no home-sale exclusion is available.

Are there any provisions, exceptions, or strategies that could help the taxpayer qualify for a gain exclusion or otherwise reduce the tax liability in this situation?

ProSeries Professional

Best answer by sjrcpa

You have to have owned and lived in it as your principal residence for 2 of the 5 years prior to sale. You can use days - so 730 days. I think that is OP’s concern. Whether the living in it meets the time constraint.

N

Norman2001

Level 6

Which home is taxpayer’s principal residence? Where does the mail go? Where does taxpayer spend most of their time living? If they’re registered to vote, which address is used? Drivers license address?

J

judys3

Level 6

Is home #2 the primary residence? If so, the home exclusion would apply

sjrcpaAnswer

Level 15

You have to have owned and lived in it as your principal residence for 2 of the 5 years prior to sale. You can use days - so 730 days. I think that is OP’s concern. Whether the living in it meets the time constraint.

The more I know the more I don’t know.

sjrcpa

Level 15

@MGC94 For your basis calculation did you include a step up to FMV as of date of death for the deceased spouse’s portion?

The more I know the more I don’t know.

BobKamman

Level 15

Good point, although from 2017 to 2020, depending on the dates, the basis might have to be stepped down.

The question is where did the taxpayer spend most of his time. The fact that it has to be asked, suggests that the answer is not the one that qualifies him for the exclusion.

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