Home Capital Gains Exemption

[TKDenver]

We need some help interpreting the home capital gains tax exemption. My (now wife) and I had separate properties when we met. Both owned and lived in for several years (meeting the 2 years in 5 rule). The chronology:

She moved into my house in December 2019 (I’m guessing this does not matter)

She sold her house in March 2020 (about $100k capital gains)

We got married in June 2020

We filed married and jointly for tax year 2020. The tax software actually asked specifics about who owned the sold property. No tax was paid on the home sale.

So, our question is – when can we sell my (now our – she has been added to the deed) house and take full advantage of the $500k capital gains exemption? March 2022 – 2 years after selling her house? June 2022 - after she has met the 2 years being married and resident in my/our house? January 2023 – after 2 tax years have passed?

 

[cathy63]

You meet the requirements now.
- at least one of you owned the home for 2 years out the past 5 years
- both of you lived in the home for 2 years out of the past 5 years
- it's been more than 2 years since either of you sold another property (based on date of sale, not tax years)