Property Ownership

A Minnesota property owner sells their home for $500,000. They have owned and lived in it for 4 years. Under the federal capital gains exclusion, how much gain can a single filer exclude?

A$250,000✓ Correct
B$500,000
C$100,000
D$0 since they haven't owned it for 5 years

Explanation

Single filers can exclude up to $250,000 of capital gain from the sale of their primary residence if they have owned and used the home for at least 2 of the past 5 years. Since this homeowner has owned and lived in the home for 4 years, they qualify for the full $250,000 exclusion. Married couples filing jointly can exclude up to $500,000.

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