If you and your ex decide to sell your home, that decision may have capital-gains tax implications. Normally, the law allows you to avoid tax on the first $250,000 of gain on the sale of your primary home if you have owned the home and lived there at least two years out of the past five. Married couples filing jointly can exclude up to $500,000 as long as either one has owned the residence and used it as their primary home. For sales after a divorce, and if those primary residence standards are met, you and your ex-spouse can each exclude up to $250,000 of gain on your individual returns. Sales after a divorce can also qualify for a reduced exclusion if the two-year tests haven’t been met. That amount depends on the portion of the two-year period the home was owned and used. If, for example, you used the home as a primary residence for one year instead of two, you can each exclude $125,000 of gain. But if you receive the house as part of the divorce settlement and sell it down the road on your own, you can exclude a maximum of $250,000 gain, and the time your spouse owned the place is added to your period of ownership for the purpose of the two-year test.