Serena is single.She purchased her principal residence three years ago.She lived in the home until she sold it at a $300,000 gain this year.Serena was allowed to exclude $250,000 of the $300,000 gain.What is the character of the $50,000 gain she was not able to exclude?

Question

Quizplus · Accepted Answer

The $50,000 gain that was not excluded is considered a long-term capital gain because Serena owned and lived in the property as her primary residence for at least 2 out of the 5 years preceding the sale. Therefore, the gain is subject to long-term capital gains tax rates.

Serena Is Single