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Lost partner but not the tax break

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Q: Several years ago, I bought a condo with my "significant other" (we weren't married) on a 50/50 percent basis. Now, we've split up, and we're selling the place. Can we both elect the maximum home-sale exclusion? K.H., New York City

A: Yes. The tax law says each member of an unmarried couple can exclude from tax up to $250,000 of home-sale gain, as long as you each owned and used the home as your principal residence for at least two of the previous five years. No restrictions exist on two single individuals claiming the maximum exclusion for the same home, as long as you both meet the stated requirements. So, the combined home-sale gain you can together exclude can be as high as $500,000. Tip: You can qualify for the exclusion again if you buy another home and then meet the two-out-of-five-year test.

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