I moved out years ago. Do I still qualify for the exclusion?

The rule in plain words

The home sale exclusion depends on ownership and use tests, and moving out stops your own use of the house. IRS Publication 523 has a rule for exactly this case: you can treat the home as your residence during the time your former spouse is allowed to live there under a divorce or separation instrument and uses it as their main home. Their living there can count as yours.

The key word is allowed. It has to be in the paperwork.

It matters most when one of you has been out of the house for a long stretch while the other stayed.

Why the paperwork matters

An informal understanding that one of you would stay in the house may not be the same as a divorce or separation instrument. Your attorney can tell you whether your judgment or written agreement says what it needs to say about who lives in the house and for how long. If you're still negotiating, raise this before the agreement is final rather than after.

If divorce or legal separation is why you're selling and you don't meet the full tests, Publication 523 also treats it as an unforeseeable event that can qualify you for a reduced exclusion.

Get it in writing.

What to bring your CPA

Gather the dates first. Bring the date you bought the house, the date you moved out, a copy of the judgment or separation agreement, your purchase and improvement records, and an estimated closing date. With those, your CPA can tell you which limit applies and whether you clear it.

If the house is staying put for a while under an agreement, see is a deferred sale an option? For the limits themselves, see do we still get the $500,000 exclusion?

Where this rule fits

This is one of several divorce rules in Publication 523, and they can work together. For example, if your spouse deeds the house to you, you count the time they owned it as your own. Ask about all of them. Which ones matter depends on who owns the house when it sells, who lived there and when, and what your divorce paperwork says, and only your CPA can put those pieces together for your return.