Which of the following statements regarding the exclusion of gain on the sale of a principal residence is correct?
A)A taxpayer may not exclude gain if the taxpayer is renting the residence at the time of the sale.
B)A taxpayer may simultaneously own two homes that are eligible for the home sale exclusion.
C)A taxpayer must be living in a residence at the time it is sold to qualify for the exclusion.
D)For a married couple to qualify for the $500,000 exclusion, both spouses must meet the ownership and use tests.

Question

Quizplus · Accepted Answer

A taxpayer may simultaneously own two homes that are eligible for the home sale exclusion. The other statements are incorrect. Taxpayers may exclude up to $250,000 ($500,000 for a married couple filing jointly) of gain on the sale of a principal residence if they have owned and lived in the home for at least two of the last five years prior to the sale. There is no requirement that the taxpayer be living in the residence at the time of the sale, and renting the residence at the time of the sale does not disqualify the taxpayer from excluding gain. Additionally, only one spouse needs to meet the ownership and use tests to qualify for the $500,000 exclusion.

Which of the Following Statements Regarding the Exclusion of Gain