Michael (single)purchased his home on July 1,2007.On July 1,2015 he moved out of the home.He rented out the home until July 1,2016 when he moved back into the home.On July 1,2017 he sold the home and realized a $300,000 gain.What amount of the gain is Michael allowed to exclude from his 2017 gross income?

Question

Quizplus · Accepted Answer

Michael meets the ownership and use tests for excluding gain on the sale of a primary residence. He owned the home for more than two years (from 2007-2017) and used it as his primary residence for at least two years (from 2007-2015 and 2016-2017). The maximum amount of gain he can exclude from gross income is $250,000 since he is a single taxpayer. Therefore, the correct answer is C.

Michael (Single)purchased His Home on July 1,2007