Which of the following is/are correct concerning a principal residence?
I.The maximum amount of gain a single taxpayer can exclude on the sale of a principal residence is $500,000.
II.To qualify for a $250,000 exclusion, a single taxpayer must have owned and used the property as a principal residence for at least 2 of the previous 5 years.

A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Question

Which of the following is/are correct concerning a principal residence?
I.The maximum amount of gain a single taxpayer can exclude on the sale of a principal residence is $500,000.
II.To qualify for a $250,000 exclusion, a single taxpayer must have owned and used the property as a principal residence for at least 2 of the previous 5 years.
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A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Quizplus · Accepted Answer

The maximum amount of gain a single taxpayer can exclude on the sale of a principal residence is $250,000, not $500,000. The $500,000 exclusion applies to married couples filing jointly. Statement II is correct as it accurately describes the ownership and use requirements to qualify for the exclusion.

Which of the Following Is/are Correct Concerning a Principal Residence