A common question after losing a spouse is whether a widow still qualifies for the married home sale exclusion of $500,000 or must revert to the single-filer limit of $250,000.
If you sell your primary home within two years of your spouse’s death, you can usually claim the $500,000 exclusion (the same as if you filed a joint return).
Once those two years pass, you generally shift to the single-filer exclusion of $250,000.
Keep in mind:
- You need to have owned and used the home as your primary residence for at least two of the previous five years (the 24 months don’t have to be consecutive).
- There are partial exclusions for certain unforeseen circumstances—like job loss, illness, or natural disasters—that may allow a prorated benefit.
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Article by Isler CPA
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