Submitted By: Patti
Answered: July 30, 2013 8:30 am

My fiancé and I each own a home that has appreciated considerably in value. Do we need to sell the homes before we get married in order to maximize the home sale exclusion?

If you sell before or after you marry and the sales take place in the year of your wedding, on a joint return you can each use the $250,000 home exclusion. However, if either excludes less than $250,000, the unused exclusion amount cannot be used by the other spouse.

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Tax Glossary

At-risk rules

Rules limiting loss deductions to cash investments and personal liability notes. An exception for real estate treats certain nonrecourse commercial loans as amounts “at risk.”

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