At most, a taxpayer is allowed to exclude gain on the sale of a principal residence once every five years no matter the circumstances.

Question

Quizplus · Accepted Answer

The statement is false. Taxpayers can exclude gain on the sale of a principal residence once every two years, as long as they have lived in the home for at least two out of the past five years before the sale. There are also certain exceptions that may allow for an additional exclusion within the two-year period, such as due to a change in employment, health reasons, or unforeseen circumstances.

At Most, a Taxpayer Is Allowed to Exclude Gain on the Sale