amount an unmarried individual may exclude from sale or exchange of residence
Other requirements had to be met. Under the 1997 Tax Law, a taxpayer may exclude up to $250,000 ($500,000 for married persons filing jointly) of gain realized on the sale or exchange of a principal residence, generally effective for sales or exchanges occurring on or after May 7, 1997. § 1.121-1 Exclusion of gain from sale or exchange of a principal residence. (a) In general. Section 121 provides that, under certain circumstances, gross income does not include gain realized on the sale or exchange of property that was owned and used by a taxpayer as the taxpayer's principal residence. The exclusion amounts. Under the rules for the sale of a principal residence, an individual may exclude from income up to $250,000 ($500,000 on a joint return) of gain. A taxpayer may elect to recognize the gain from the sale of their residence. Subject to the other provisions of section 121, a taxpayer may exclude gain only if, during the 5-year period ending on the date of the sale or exchange, the taxpayer owned and used the property as the taxpayer's principal residence for periods aggregating 2 years or more. (b) Residence—(1) In general. • how to determine if a home is a principal residence; • when gain from the sale of vacant land that was used as part of the residence. may be excluded; • when and how to allocate the gain between residential and business use of. the property; • how the exclusion applies to joint owners who are not married; and. (a) Exclusion. Gross income shall not include gain from the sale or exchange of property if, during the 5-year period ending on the date of the sale or exchange, such property has been owned and used by the taxpayer as the taxpayer’s principal residence for periods aggregating 2 years or more. However, taxpayers may elect to have the prior laws rules (rather than the new exclusion) apply to a sale or exchange (1) made before the 1997 Tax Law enactment, (2) made after the date of enactment under binding contract in effect on that date, or (3) where a replacement residence for rollover was acquired in or before the date of enactment or ... In the case of a sale or exchange of property by an unmarried individual whose spouse is deceased on the date of such sale, paragraph (1) shall be applied by substituting “$500,000” for “$250,000” if such sale occurs not later than 2 years after the date of death of such spouse and the requirements of paragraph (2)(A) were met immediately before ... Under the use test, the individual must have occupied the residence as a principal residence for a total of at least two of the five years before the sale or exchange. The ownership and use tests may be met at different times, provided both tests are met for the five-year period before the sale. L. 95–600, § 404(a), substituted “One-time exclusion of gain from sale of principal residence by individual who has attained age 55” for “Gain from sale or exchange of residence of individual who has attained age 65” in section catchline.
“$500,000” for “$250,000”