Jenna,who is single,sold her principal residence on December 1,2018,and excluded the $150,000 gain because she met the ownership and usage requirements under Sec.121.Jenna purchased another residence in Pensacola on January 1,2019,that she occupied until July 1,2019,when she received a new job offer from an employer in Miami.She sells the Pensacola residence on October 1,2019,and realizes a gain of $40,000.Jenna may exclude what amount of the gain from the sale on October 1,2019?

Question

Quizplus · Accepted Answer

To qualify for the exclusion under Sec. 121, the taxpayer must have owned and used the property as their principal residence for at least two out of the five years preceding the sale. In this case, Jenna met this requirement for her previous residence but did not meet it for the Pensacola residence. Therefore, she cannot exclude any of the $40,000 gain from the sale of the Pensacola residence on October 1, 2019.

Jenna,who Is Single,sold Her Principal Residence on December 1,2018,and Excluded