| The death of a spouse is a difficult thing to deal with | | | | law, the sale of a primary residence gets preferential |
| emotionally and financially. Fortunately, the federal | | | | treatment. Single filers can exclude up to $250,000 of |
| government makes many tax accommodations for | | | | capital gain from their taxable income and couples filing |
| surviving spouses. | | | | jointly can exclude as much as $500,000. |
| A surviving spouse may file a joint return during the | | | | Because surviving spouses can file jointly even after |
| year in which their spouse dies. In the event the | | | | the death of their spouse, a widow or widower may |
| surviving spouse still has dependent children living at | | | | be able to claim the entire exclusion of $500,000. |
| home, they may file a joint status for the two following | | | | There are a couple of qualifiers for you to be able to |
| years as well. | | | | do this. For one, you and your spouse must have used |
| When the surviving spouse files jointly, he or she must | | | | the property as a primary residence for at least two |
| sign the return and write filing as surviving spouse in | | | | out of the last five years prior to your spouse's death |
| the signature area. When the return is complete, the | | | | and either you, your spouse, or both of you must have |
| name of the deceased spouse, the word deceased, | | | | owned the property during this period. Lastly, for two |
| and the date of his or her death should be written | | | | years prior to your spouse's death neither one of you |
| across the top of the return. | | | | could have taken this exclusion on another property. |
| Often, after the death of a spouse, the survivor may | | | | Your home, stocks, rental property, mutual funds and |
| choose to sell the family home. There are some | | | | other appreciated assets take a step up in tax basis, |
| benefits to be had here, under the current tax law. | | | | meaning that in determining capital gain, the value of |
| Usually, any capital gain made by selling real estate | | | | the property as it now stands, rather than its value |
| property is taxed as income. Under the current tax | | | | when originally purchased, is used. |