This year,Fred and Wilma,married filing joint,sold their home (sales price $750,000; cost $200,000).All closing costs were paid by the buyer.Fred and Wilma owned and lived in their home for 20 years.How much of the gain is included in gross income?

Question

Quizplus · Accepted Answer

Fred and Wilma can exclude up to $500,000 of the gain from the sale of their home because they meet the ownership and use tests for the exclusion. The gain is $550,000 ($750,000 - $200,000), so $50,000 is included in gross income.

This Year,Fred and Wilma,married Filing Joint,sold Their Home (Sales Price