What is Primary Residence: IRC Section 121?
Couples filing a joint tax return can exclude up to $500,000 of gain on the sale of their principal residence, and single filers can exclude up to $250,000. Home must have been the primary residence of both spouses 2 of the last 5 years. $500,000 exclusion available once every 2 years. Vacation homes and second homes do not qualify. If the home was used as a rental and a primary residence during ownership, any depreciation taken after May 7, 1997, must be recognized on the sale. ALWAYS CONSULT YOUR CPA.
