Millie and Britt have owned 2 homes for the past 7 years, 1 in Manhattan and 1 in Tampa. 6 years ago they separated, and Millie decided to stay in Manhattan, with Britt electing to live in Tampa. They now want to sell the house in Manhattan and buy Millie a condo. Can Britt and Millie exclude up to $500,000 of gain when they sell the home if they file a separately for income tax?
A Yes, Britt and Millie may take their one-time tax exclusion on the gain from the sale of either home.
B Yes, as long as Britt and Millie have owned the home for 2 of the last 5 years, they may exclude up to $500,000 of gain when they sell the home.
C No, they can only claim $250,000 for taxes since they filing separately
D No, Both Britt and Miller must have lived in and used the home to qualify for the $500,000 exclusion.