One of the principle legal questions left in the wake of the United States Supreme CourtÃ¢â‚¬â„¢s decision striking down key portions of the Defense of Marriage Act (United States v. Windsor) was the tax impact it would have on same-sex spouses. That is, would the IRS now recognize the marriages of same-sex spouses who live in any state, or only in those states that legally recognize same-sex marriages?… The IRS has answered this question with a resounding yes, ruling that it will recognize the married status of legally married same-sex couples, regardless of what state they now live in. (IRS Revenue Ruling 2013-17.)
The ruling also has important tax implications for same-sex couples who own real estate. For example, same-sex spouses who own a home and have a mortgage together will be able to claim the home mortgage interest deduction jointly on their joint tax return, like any other married couple. There is no need to split the deduction between them on their individual returns.
Additionally, same-sex spouses who file jointly will qualify for the $500,000 home-sale tax exclusion, instead of the $250,000 exclusion for single taxpayers. If one spouse dies, the surviving spouse qualifies for the $500,000 exemption if the home is sold within two years.
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