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June 5, 2019
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Does "2 out of 5 previous years" include primary (or sole) residency by ex-spouse?

  • June 5, 2019
  • 1 reply
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If a couple who already divorced have the non-owning ex-spouse as the primary (or sole) resident of the house, then does that count as "2 out of the 5 previous years" when it comes to determining capital gains tax on the sale?

Best answer by rjs

The following is from IRS Publication 523, page 5.

Separation or divorce. You can count a home as your residence during any period when ALL of the following are true.

  • You are a sole or joint owner.
  • Your spouse or former spouse is allowed to live in it under a divorce or separation agreement.
  • Your spouse or former spouse uses it as his or her residence (not just as a second home).

1 reply

rjs
rjsAnswer
Employee
June 5, 2019

The following is from IRS Publication 523, page 5.

Separation or divorce. You can count a home as your residence during any period when ALL of the following are true.

  • You are a sole or joint owner.
  • Your spouse or former spouse is allowed to live in it under a divorce or separation agreement.
  • Your spouse or former spouse uses it as his or her residence (not just as a second home).
June 5, 2019
Does the "divorce or separation agreement" have to be legally recorded, or is an informal agreement sufficient?