Must married couples file jointly to recieve the 500K capital gain tax deduction?
by 
ChristopherTrent
ANSWERS: 1
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Yes, you have to file a joint return. Here are other criteria to qualify for the $500K capital gain from home sale exclusion: 1) During a five year period ending on the date of sale, either you or your spouse must own the home for at least two years 2) During a five year period ending on the date of sale, BOTH spouses must have lived in the house for at least 2 years. 3) During a two year period ending on the date of sale, neither you or your spouse can have excluded a gain from a sale of a home. If these requirements are all not met, your exclusion is reduced to the total of the exclusions you each would qualify for as single individuals. If you lived in the home for less than two years, you can qualify for a reduced exclusion in most cases. IRS Publication 523 speaks all about this. http://www.irs.gov/publications/p523/ There is a special exception in cases of divorce and separation. You are considered to have used property as your main home during any period when: 1) You owned it, and 2) Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home.
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