A taxpayer must have owned and lived in a personal residence at least two of the last five years in order to qualify for the maximum exclusion of gain on the sale of that residence.

Question

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This is known as the "2 out of 5 year rule" and allows taxpayers to exclude up to $250,000 ($500,000 for married couples filing jointly) of gain on the sale of their primary residence.

A Taxpayer Must Have Owned and Lived in a Personal