Dear Tax Talk,
I just sold my home and I am single, but I will be married by the end of the year. Can I file the $500,000 exclusion for capital gains or do I have to file the $250,000? Also, I have only some receipts for the home improvements. Is there a max on what I can put down on improvements? Thanks so much.
— Eleanor


Dear Eleanor,
You can exclude up to $250,000 of the
gain on the sale of your home if you’ve owned and lived in your home for two years within the five years ending on the date you sell it. You can claim the exclusion once every two years.

You can exclude up to $500,000 of the gain on the sale of your home if you’re married during the year and file a joint return (even if you marry after the sale) and both you and your spouse lived in the home, even though only one of you owned the home.

However, you cannot claim the $500,000 exclusion on your tax return if your future husband claimed the exclusion within two years of your sale. If this were the case, you could only claim the $250,000 exclusion.

While there’s no maximum you can claim in
improvements, you can only claim improvements that still exist at the time you sell the home. For example, if you put wall-to-wall carpet in and later replaced it with tile, then you could not count the cost of the wall-to-wall carpet. Similarly, repairs that maintain your home in good condition but do not add to the value of your home would not be counted as an improvement. For example, painting the interior or exterior or replacing broken glass would not be considered an improvement.