Which of the following is true about the gain excluded on the sale of a personal residence by certain individuals?
A)The taxpayer generally must be at least 55 years of age on the date of sale.If husband and wife sell a jointly owned residence, both must be at least 55 years of age.
B)The residence must have been used by the taxpayer as his/her personal residence for at least five of the seven years preceding the sale.
C)Any portion of gain in excess of the limit must be recognized.
D)Only one residence qualifies for this exclusion during a person's lifetime.

Question

Quizplus · Accepted Answer

The correct statement regarding the gain excluded on the sale of a personal residence is that any portion of gain in excess of the limit must be recognized. The other options describe outdated rules that were replaced by the Taxpayer Relief Act of 1997. Under current U.S. tax law, individuals can exclude up to $250,000 ($500,000 for married couples 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. There is no age requirement, and the exclusion can be used multiple times, but not more frequently than once every two years.

Which of the Following Is True About the Gain Excluded