On February 1,2013 Stephen (who is single) sold his principal residence (home 1) at a $100,000 gain.He was able to exclude the entire gain on his 2013 tax return.Stephen purchased and moved into home 2 on the same day.Assuming Stephen lives in home 2 as his principal residence until he sells it,which of the following statements is true?

Question

Quizplus · Accepted Answer

According to the IRS guidelines, if Stephen sells home 2 after using it as his principal residence for at least 2 out of the 5 years prior to the sale, he may be able to exclude up to $250,000 of gain ($500,000 if he is married and filing jointly) on his tax return, as long as he meets other eligibility requirements. Therefore, Stephen may be able to exclude gain on home 2 even if he sells it in 2013, as long as he meets the eligibility requirements.

On February 1,2013 Stephen (Who Is Single) Sold His Principal