I am selling a house and getting married, would it be better to claim cap gains before or after?

Question

My fiance owns his own business and it is incorporated. He has filed a loss the past two years on the business and his personal income is low. He has tax credit. I earn about 70,000 a year and have standard deductions.

Answer 1

The particulars of your and your fiance's taxes do not effect the tax on the gain of the sale of your home. The capital gains tax is basically 15% regardless of your marital status or filing status.

I assume that you alone own the home and have owned and lived in it for two of the past five years.

If you sell the home before you are married, you can exclude $250,000 from the gain on the sale of your home.

If you sell the home after you are married, then you can exclude $500,000 of gain on the sale of your home as long as your spouse has lived in the home for two of the past five years. Otherwise, you can exclude $250,000.

Answer 2

The rule on personal residence sales is that if you have used it as your principal residence for two of the last five years, a single person can exclude up to $250,000 of gain from the sale. While this amount is doubled for a married couple, the increased amount will not apply if your fiance did not also use the home as his main residence for two of the last 5 years. If your gain is less than $250,000 it won't make any difference if the sale is before or after the wedding. Of course if any part of the home was used for business and depreciated, that part is not eligible for the exclusion.

Answer 3

If you are married by the end of the year in which the home is sold, it doesn't matter if the sale occurs before or after the wedding. Unless your gain on the sale is more than the $250,000 exclusion or your spouse has claimed the exemption i the last 2 years, it won't matter even if the sale and the marriage are in different years.

Answer 4

After.

Answer 5

I would sell after you get married. Taxes are much nicer to married folk.