Heidi (single) purchased a home on January 1, 2006 for $400,000. She lived in the home as her primary residence until January 1, 2014 when she began using the home as a vacation home. She used the home as a vacation home until January 1, 2015 (she used a different home as her primary residence from January 1, 2014 to January 1, 2015). On January 1, 2015, Heidi moved back into the home and used it as her primary residence until January 1, 2016 when she sold the home for $700,000. What amount of the $300,000 gain Heidi realized on the sale must she recognize for tax purposes in 2016?

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The Answer of Heidi (single) purchased a home on January 1, 2006 for $400,000. She lived in the home as her primary residence until January 1, 2014 when she began using the home as a vacation home. She used the home as a vacation home until January 1, 2015 (she used a different home as her primary residence from January 1, 2014 to January 1, 2015). On January 1, 2015, Heidi moved back into the home and used it as her primary residence until January 1, 2016 when she sold the home for $700,000. What amount of the $300,000 gain Heidi realized on the sale must she recognize for tax purposes in 2016?

Heidi (Single) Purchased a Home on January 1, 2006 for $400,000