A single taxpayer who meets the ownership and use tests may exclude gain of $250,000 on the sale of her principal residence under § 121.Any gain in excess of $250,000 must be recognized.

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Under § 121 of the Internal Revenue Code, a single taxpayer can exclude up to $250,000 of gain from the sale of a principal residence, provided they meet the ownership and use tests. Any gain over $250,000 must be recognized as taxable income.

A Single Taxpayer Who Meets the Ownership and Use Tests