Property Ownership
A California homeowner has lived in their primary residence for 2 of the past 5 years and is selling it. What is the maximum federal capital gains exclusion available to a single filer?
A$125,000
B$250,000✓ Correct
C$500,000
DNo exclusion is available
Explanation
Under IRC Section 121, a single taxpayer may exclude up to $250,000 of capital gain from the sale of a primary residence, provided they owned and used it as their principal residence for at least 2 of the 5 years preceding the sale. Married couples filing jointly may exclude up to $500,000.
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