| The IRS will not extend a home sale tax break for surviving spouses!
For sales of principal residences after the year 2007, "a survivor can use the full $500,00 capital gain exclusion on the sale of a primary residence if the house is sold within 2 years of the death of the spouse." Clearly, the survivor is being treated as if she is still being married!
However, the IRS has stated that "if the surviving spouse cannot sell the home within the 2 years, then the surviving spouse loses the $500,000 capital gain exclusion available to the married filers, and instead can only claim the lower $250,000 capital exclusion that is available to single filing taxpayers!"
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