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Tax, SDIRAs & Cost Segregation

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Freddy Neuhold
  • Investor
  • Texas
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Recently married capital gains tax - I'm a citizen, my wife isn't

Freddy Neuhold
  • Investor
  • Texas
Posted Feb 28 2024, 15:20

I am selling my primary residence in San Antonio, TX. My wife is Filipino and not a citizen of the US currently, we married in September of 2023.

My question: While we've only been married for 5.5 months, can we qualify for the joint filing $500k exemption? Specifically wondering if my wife not being a US citizen will disqualify us or something. I've owned and lived at the property since 2021 so I meet those requirements. Just wondering if newly weds can still qualify for the exemption and if my wife not being a citizen will hinder any capital gains tax exemption qualifications. We're selling the property for $350,000

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Caroline Gerardo
  • Lender
  • Laguna Niguel, CA
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Caroline Gerardo
  • Lender
  • Laguna Niguel, CA
Replied Feb 28 2024, 16:51

She needs to be on title. She must file a US IRS return and in your state which I think is TX. Since filing is open for the IRS do it online digitally. How many days has she been in the US?

This is owner occupied? What is basis or original purchase price plus how much you paid to fix it up?

Account Closed
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Account Closed
Replied Feb 28 2024, 16:52
Quote from @Freddy Neuhold:

I am selling my primary residence in San Antonio, TX. My wife is Filipino and not a citizen of the US currently, we married in September of 2023.

My question: While we've only been married for 5.5 months, can we qualify for the joint filing $500k exemption? Specifically wondering if my wife not being a US citizen will disqualify us or something. I've owned and lived at the property since 2021 so I meet those requirements. Just wondering if newly weds can still qualify for the exemption and if my wife not being a citizen will hinder any capital gains tax exemption qualifications. We're selling the property for $350,000

Yes, as long as you have owned and lived in the property as your primary residence for at least two out of the last five years, you should qualify for the capital gains tax exemption of up to $500,000 for married couples filing jointly. Being married for only 5.5 months should not affect your eligibility for the exemption. Additionally, your wife's citizenship status should not impact your qualification for the exemption as long as she is a resident alien with a valid Social Security number. However, it is always advisable to consult with a tax professional or accountant to ensure that you meet all the necessary requirements for the exemption.
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Freddy Neuhold
  • Investor
  • Texas
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8
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Freddy Neuhold
  • Investor
  • Texas
Replied Feb 28 2024, 17:53
Quote from @Account Closed:
Quote from @Freddy Neuhold:

I am selling my primary residence in San Antonio, TX. My wife is Filipino and not a citizen of the US currently, we married in September of 2023.

My question: While we've only been married for 5.5 months, can we qualify for the joint filing $500k exemption? Specifically wondering if my wife not being a US citizen will disqualify us or something. I've owned and lived at the property since 2021 so I meet those requirements. Just wondering if newly weds can still qualify for the exemption and if my wife not being a citizen will hinder any capital gains tax exemption qualifications. We're selling the property for $350,000

Yes, as long as you have owned and lived in the property as your primary residence for at least two out of the last five years, you should qualify for the capital gains tax exemption of up to $500,000 for married couples filing jointly. Being married for only 5.5 months should not affect your eligibility for the exemption. Additionally, your wife's citizenship status should not impact your qualification for the exemption as long as she is a resident alien with a valid Social Security number. However, it is always advisable to consult with a tax professional or accountant to ensure that you meet all the necessary requirements for the exemption.

 She's not a resident either, has never been in the US yet. Currently working on getting her B2 visa though. Does not even being a resident make a big difference?

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Justin Brickman
  • Realtor
  • San Antonio, TX
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Justin Brickman
  • Realtor
  • San Antonio, TX
Replied Feb 29 2024, 06:08

I believe you both have to live in the home for 2 of the last 5 years in order to qualify for the nontaxable $500K 

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Michael Carson
  • Banker
  • San Antonio, TX
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Michael Carson
  • Banker
  • San Antonio, TX
Replied Feb 29 2024, 07:30

If your basis is at least $100k then you'll be ok regardless since your gain won't exceed $250k. 

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Zachary Jensen
Tax & Financial Services
#4 Tax, SDIRAs & Cost Segregation Contributor
  • Accountant
  • San Diego, CA
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Zachary Jensen
Tax & Financial Services
#4 Tax, SDIRAs & Cost Segregation Contributor
  • Accountant
  • San Diego, CA
Replied Feb 29 2024, 10:26
Quote from @Justin Brickman:

I believe you both have to live in the home for 2 of the last 5 years in order to qualify for the nontaxable $500K 

 That is correct, google "section 121 exclusion" or talk with your accountant for more info!