The Mortgage Forgiveness Debt Relief act signed last December provides of up $500,000 in profits tax-free for widowed spouses concerning the sale of a primary residence owned jointly by them as long as the sale occurs within 2 years after the death of one of the spouses. Previously, a home had to be sold the same year as a spouse's death to qualify for the $500,000 profits exclusion, otherwise the exclusion dropped to $250,000. This was an another example of just totally stupid tax laws which were finally corrected. There are thousands of additional stupid tax provisions in the law right now and we can only hope for tax reform some day but don't hold your breath. Before this change, if a spouse died late in the year the other spouse had no real opportunity to even think and plan.
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- Topic: ActiveRain Community