A homeowner gets married and the new spouse moves into the home. The homeowner has owned and lived in the home for more than 10 years. Can they get the double $250,000 exclusion for a married couple? Remember, you must live in the home two of the last five years. 

The rule: With married couples only one person has to meet the ownership rule but both must meet the use rule. So they do not qualify for the $500,000 deal.

I had a broker call me many years ago with a different issue. They had lived together for more than 10 years in the current home that was owned by the broker but they were not married. No deal – but if they got married, they would get the larger exclusion and in their tax bracket they might save about $75,000 considering both Federal and State taxes. But they did not want to get married. I would say, “get married, and then find irreconcilable differences in a week or so and get a divorce. I would for sure visit a good attorney and get a prenuptial contract.”

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