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If you and your spouse file a joint return for the year, you can exclude up to $250,000 in gain if either spouse meets the ownership and use test, and up to $500,000 if both spouses meet the use test and at least one spouse meets the ownership test.
If each spouse sells a different home, each spouse can deduct up to $250,000 in gain provided that each meets the ownership and use test with regard to their own home.
If one spouse dies before a sale is accomplished, the other spouse can use the decedent's time of ownership and use in order to qualify for the exemption.
Divorce. If a home is transferred from one spouse to the other as part of a divorce settlement, the recipient is treated as having owned the home during any time the transferor owned it.
Also, in cases where the home is not sold for a while after the divorce (for example, the couple agrees to maintain joint ownership, so one spouse can live there with the children until they finish high school), you are considered to have used the property as your main home during any period when you owned it, and your spouse or former spouse is allowed to use it under a divorce or separation instrument.