A taxpayer who otherwise meets the ownership and use tests may not be allowed to exclude all of her realized gain if the taxpayer has nonqualified use of the home before selling.

Question

Quizplus · Accepted Answer

If a taxpayer has nonqualified use of their home before selling, they may not be able to exclude all of their realized gain, even if they meet the ownership and use tests. This is because they would have to allocate a portion of the gain to the period of nonqualified use.

A Taxpayer Who Otherwise Meets the Ownership and Use Tests