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Exemption valid with one spouse's name

My wife and I have lived in my house for longer than the required 24 months to claim the Internal Revenue Code 121 tax exemption. But only my name is listed on the title as the owner. I owned the house before we married. Does her name need to be added to the title to make us eligible for the $500,000 exemption?

No. A specific clause in IRC 121 says that for a married couple, title to the principal residence can be held in the name of one spouse alone, but each spouse is entitled to a $250,000 exemption if (1) the 24-month ownership and occupancy test within the last 60 months before sale is met by each spouse, and (2) if they file a joint tax return in the year of home sale.

Ways to avoid probate

My 82-year-old mother owns her modest home, which is probably worth about $100,000. Title is in her name alone. I have showed her your articles about the benefits of holding title in a revocable living trust to avoid probate, in case she gets Alzheimer's disease or has a severe stroke. But she is very stubborn and thinks that because she has a small estate, worth less than $600,000, she doesn't need a living trust or even a will. I am her only heir. As her health is declining, is there any other way to avoid probate when she dies? I have heard horror stories about probate costs and delays.

A few states have probate court exemptions for small estates, but your mother doesn't appear to qualify. I don't know where the $600,000 amount came from, but there is no probate exemption for estates below that amount.

The two primary ways to avoid probate of estates are (1) hold real estate title in a joint tenancy with right of survivorship, or (2) hold title in a revocable living trust.

Especially since your mother doesn't have a written will, after she dies probate court proceedings will be required to distribute the estate according to the intestate succession law in the state where she lives. At a minimum, probate court proceedings take six months, often much longer. More information is at my Web site,; click on "living trusts."

Clear title before sale

My mother and I owned a house together as joint tenants with right of survivorship. She died about eight years ago, but her name is still on the title. Will that prevent my selling the house?

Temporarily, yes. In most states, when one joint tenant with right of survivorship dies, all that is required to clear the title is for the surviving joint tenant to record a certified copy of the death certificate and an affidavit of survivorship.

This should be taken care of as soon as possible after a joint tenant's death. Until you clear the title, you can't convey marketable title.

Lien refund not usual

My wife and I bought our home from my father in 2004. In 2005, we refinanced the mortgage. There was a lien against the title for my father's income taxes. At the mortgage refinance closing, the attorney told us we must pay the $1,808 tax lien even though my father owed it. I have since learned the attorney should have put the $1,808 into escrow until the tax collector was made aware of the mistake. What are our options to get the $1,808 refunded?

If the recorded income tax lien had not been paid, title was not marketable and a lender's title insurance policy would not have been issued.

You can apply for a refund, but it is usually very difficult to get a tax refund from any government agency. My suggestion is ask your father to pay you the $1,808 income tax he owed so you can forget it.

You can send e-mail to Robert J. Bruss by visiting his Web site, Click on "Ask Bob a Real Estate Question.'' Or write to Robert J. Bruss, 251 Park Road, Burlingame, CA 94010.


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