A taxpayer must purchase a new personal residence in order to exclude any gain from the sale of the old residence.

Question

Quizplus · Accepted Answer

This statement is false. A taxpayer may be eligible to exclude up to $250,000 ($500,000 for married taxpayers filing jointly) of gain from the sale of their primary residence if they owned and used the property as their main home for at least 2 out of the 5 years prior to the sale. They do not need to purchase a new residence in order to qualify for the exclusion.

A Taxpayer Must Purchase a New Personal Residence in Order