The maximum amount for the § 121 exclusion (exclusion of gain on sale of principal residence)that can reduce taxable income for an unmarried taxpayer is $250,000 and for a married taxpayer is $500,000.

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This is correct as per the IRS guidelines. The § 121 exclusion allows taxpayers to exclude up to $250,000 of gain from the sale of their principal residence if they are single, and up to $500,000 if they are married and file a joint return.

The Maximum Amount for the § 121 Exclusion (Exclusion of Gain