On August 8, 2016, Sam, single, age 62, sold for $210,000 his principal residence, which he has lived in for 10 years, and which had an adjusted basis of $60,000. On November 1, 2016, he purchased a new residence for $80,000. For 2016, Sam should recognize a gain on the sale of his residence of:

Question

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Sam can exclude up to $250,000 of gain from the sale of his principal residence under the IRS home sale exclusion rule. His gain is $150,000 ($210,000 - $60,000), which is fully excluded, resulting in a recognized gain of $0.

On August 8, 2016, Sam, Single, Age 62, Sold for $210,000