Which of the following statements concerning the exclusion available under Section 121 for the sale of a personal residence is correct?
A)This provision allows 50% of the gain from sale of any residence to be excluded from income.
B)A vacation home used as a residence for at least five months of the year will qualify for this exclusion.
C)It is possible for taxpayers to sell their home and qualify for this exclusion every two years.
D)The gain on the sale can be deferred and rolled over into another residence instead of electing the exclusion.

Question

Quizplus · Accepted Answer

Section 121 of the Internal Revenue Code allows taxpayers to exclude up to $250,000 ($500,000 if married filing jointly) of gain from the sale of their primary residence, provided they have owned and used it as their main home for at least two out of the five years before the sale. This exclusion can be used every two years, making option C correct. Options A, B, and D describe provisions that are not accurate representations of the current law under Section 121.

Which of the Following Statements Concerning the Exclusion Available Under