Kitty, who is single, sells her principal residence, which she has owned and occupied for 8 years, for $375,000. The adjusted basis is $64,000, selling expenses are $22,000, and repairs to make the house more marketable are $7,000. Her recognized gain is $32,000.

Question

Quizplus · Accepted Answer

Kitty is eligible for the home sale exclusion of up to $250,000 ($500,000 if married filing jointly) of the gain on the sale of her principal residence since she has owned and occupied it for at least 2 out of the 5 years preceding the sale. Therefore, her recognized gain would be $0, not $32,000.

Kitty, Who Is Single, Sells Her Principal Residence, Which She