The rules about investing in a home of greater or equal value within a certain period of time after the sale are long gone (1997).
The current rules… if you lived in the home 2 our of the last 5 years from the date of sale, your GAIN can be up to $500,000 (married filing joint) or $250,000 (single)…
But what about if a spouse dies at the end of 2014, and the home is sold by the remaining spouse in 2015?
There is a special rule that allows the surviving spouse to use the $500,000 exclusion IF THE SALE OCCURS WITHIN 2 YEARS OF THE DATE OF DEATH.