Under § 121 (exclusion of gain on sale of principal residence),a married couple can exclude a maximum of $500,000 on a joint return even if one spouse had no ownership interest in the residence.

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As per § 121, a married couple filing a joint return can exclude up to $500,000 of the gain on the sale of their principal residence, regardless of which spouse actually owns the property or has an ownership interest in it. Therefore, the statement is true.

Under § 121 (Exclusion of Gain on Sale of Principal