On November 1, 2014, Jamie (who is single) purchased and moved into her principal residence. In early 2015, Jamie was laid off from her job. On February 1, 2015, Jamie sold the home at a $35,000 gain. She sold the home because she found a new job in a different state. How much of the gain, if any, may Jamie exclude from her gross income in 2015?

Question

Quizplus · Accepted Answer

According to IRS rules, a taxpayer may exclude up to $250,000 of gain ($500,000 for married taxpayers filing jointly) from the sale of a principal residence if they have owned and used it as their principal residence for at least two of the five years preceding the sale. In this case, Jamie owned and used the home as her principal residence for only three months, so she does not meet the ownership and use requirements for the exclusion. Therefore, the amount of the gain that may be excluded is $0, making choice A the correct answer.

On November 1, 2014, Jamie (Who Is Single) Purchased and Moved