Home Sale Exclusion for a Surviving Spouse
How much gain can a surviving spouse exclude on the house, and for how long? Every piece below can be linked to, so it opens in a window on your reader's screen, current as of the record. No form to fill in.
2026 law · Reviewed September 6, 2026 · The full page, with methodology and sources · the terms · All tools
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The cost, the value at death, the sale price, and the months since the death in; the stepped-up basis, the exclusion that applies, the taxable gain, and what the same sale would owe past the window out. In a frame it carries no cookies, no tracking, and a visible link back to the methodology. Your site has to allow frames; most do. The link that opens it in a small window is on the professionals page.
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- In plain words.
- When you sell your main home, up to $250,000 of profit is tax-free, or $500,000 for a married couple. A widow or widower keeps the couple's $500,000 for a sale within two years of the death, then drops to $250,000. And because the late spouse's share of the house got a fresh tax cost at death, the profit being measured is smaller than it looks. This tool combines the two rules and shows the taxable profit inside the window and past it.
- Why it matters.
- The two-year window is a real deadline with a real dollar difference, and it is easy to miss while everything else after a death is being handled.
- An example.
- A home bought for $200,000, worth $900,000 at the death, sold for $1,200,000 eighteen months later: the taxable profit is $150,000. The same sale at thirty months would leave $400,000 taxable.
- Where it stops.
- It assumes the home was your main residence with no rental or home-office use, no earlier home-sale exclusion in the last two years, and no remarriage before the sale.
The facts
Six quotable sentences on the home-sale exclusion after a spouse dies.
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- Gain on the sale of a principal residence owned and used for two of the last five years is excluded up to $250,000, or $500,000 on a joint return (§ 121(a), (b)(1), (b)(2)). The amounts are statutory and have not changed since 1997.
- A surviving spouse keeps the $500,000 for a sale within 2 years of the death, if the couple qualified for it just before the death and the survivor has not remarried (§ 121(b)(4)). One day past the window, the amount is $250,000.
- The deceased spouse's ownership and use count as the survivor's (§ 121(d)(2)), so a home the couple lived in for years qualifies even if it was titled in one name.
- The exclusion stacks on the step-up in basis. In Illinois a jointly held home steps up by half at the first death; the survivor's gain is measured from that new basis, and the exclusion applies to what remains.
- Example: a home bought for $200,000, worth $900,000 at the death, sold for $1,200,000 eighteen months later. The new basis is $550,000, the gain $650,000, $500,000 excluded, $150,000 taxable; the same sale at 30 months would have $400,000 taxable.
- A sale before the two-year use test is met, forced by work, health, or unforeseen circumstances, earns a prorated exclusion: the months of use over 24, times the full amount (§ 121(c)). A death in the family is among the unforeseen circumstances the regulations name.
The exclusion, by when the survivor sells
The amount available in each situation.
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| Situation | Exclusion | Authority |
|---|---|---|
| Joint return, both qualified | $500,000 | § 121(b)(2) |
| Survivor sells within 2 years of the death, not remarried | $500,000 | § 121(b)(4) |
| Survivor sells more than 2 years after | $250,000 | § 121(b)(1) |
| Survivor remarries and sells on a joint return with the new spouse | $500,000 if the new spouse also meets the use test | § 121(b)(2) |
| Use test not met; sale for work, health, or unforeseen circumstances | Months of use ÷ 24 × the amount above | § 121(c) |
| Use test not met, no such reason | None | § 121(a) |
| Deceased spouse's years in the home | Count as the survivor's | § 121(d)(2) |
Cite and link.
The clean address, a citation generated from the record so it can never carry a stale review date, and an address for every section so you can point a reader at the exact table or method.
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- Link
- https://consideratecapital.com/tools/home-sale-exclusion-surviving-spouse
- Citation
- Considerate Capital, "Home Sale Exclusion for a Surviving Spouse," reviewed September 6, 2026, https://consideratecapital.com/tools/home-sale-exclusion-surviving-spouse.
Link to a section
- The calculator https://consideratecapital.com/tools/home-sale-exclusion-surviving-spouse#calculator
- The facts https://consideratecapital.com/tools/home-sale-exclusion-surviving-spouse#facts
- By when the survivor sells https://consideratecapital.com/tools/home-sale-exclusion-surviving-spouse#key-numbers
- How the window works https://consideratecapital.com/tools/home-sale-exclusion-surviving-spouse#how-it-works
- Methodology https://consideratecapital.com/tools/home-sale-exclusion-surviving-spouse#methodology
- Sources https://consideratecapital.com/tools/home-sale-exclusion-surviving-spouse#sources
- Revision history https://consideratecapital.com/tools/home-sale-exclusion-surviving-spouse#revision-history
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