Let's say you have remarried but kept the personal residence that you shared with your former spouse. Is there any way to resurrect the full $500,000 exclusion from taxation for the possible eventual sale of the home?

The answer is yes. It's really a simple matter. The tax code says you must live in the home for a cumulative total of two of the prior five years in order to claim the $500,000 exclusion as husband and wife filing jointly.

Therefore, you and your new spouse need only reside in the home for two years and, voila, the $500,000 exclusion is available to you if you sell your home. You could even rent the house out for a time before selling, assuming that the provable sum total of all the time you lived in the home meets or beats 24 months.

As always, we strongly suggest that you consult with your tax advisor when taking advantage of such home-related tax benefits. Perhaps the main point to be made here is simply this: Don't make negative assumptions about whether you can hold on to your $500,000 exclusion if extraordinary circumstances come along. For more information, call Beth at (425) 450-5208 and visit her website at www.bethbillington.com.

Beth Billington is a Realtor® with Coldwell Banker Bain in Bellevue, WA.