The taxpayer must be occupying the residence at the time of the sale in order for Sec.121 to apply.

Name: The taxpayer must be occupying the residence at the time of the sale in order for Sec.121 to apply.
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Sec. 121 allows for the exclusion of gain from the sale of a principal residence if the taxpayer has owned and used the property as their main home for at least two out of the five years preceding the sale, but they do not need to be occupying it at the time of sale.

The Taxpayer Must Be Occupying the Residence at the Time