Legal Question in Real Estate Law in North Carolina

Capital Gains

Husband a I owned home in NC and VA. I lived in home in NC for over two years, husband was there more than 80% of the time. Have spoke to tax auditor in NC and they will change to show only owing half since one person lived in home all of two years. Said husband never gave up domain. But he was in VA trying to get home ready for sale. Do we owe capital gains. Profit only 130,000.00. Thought you could make a profit of 250,000.00 with no penalty. Please help.


Asked on 2/27/07, 3:00 pm

1 Answer from Attorneys
Michael Hendrickson Law Office Michael E. Hendrickson

Re: Capital Gains

Unfortunately, the IRS rule requires

both spouses to be in the subject house for the entire two years in order to gain eligibility for the complete capital gains exclusion available to a married couple. If one of the two admits to being in the home only 80% of the required time, the couple will have to settle at most for a reduced and pro-rated exclusion amount, which apparently is what has happened in your particular case.

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Answered on 2/27/07, 10:40 pm


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