Section 121

(redirected from 26 U.S.C.§121)

Section 121 (26 U.S.C.§121)

The Internal Revenue Code section that addresses taxable income upon the sale of a principal residence.An unmarried individual may exclude up to $250,000 of gain from income;married persons filing joint returns may exclude up to $500,000 of gain.The taxpayer must have owned and occupied the property for at least 2 of the prior 5 years and this exclusion can be used as frequently as every 2 years.For many Americans,this ability to buy a home, fix it up, sell it in 2 years for a large profit, and then do it all over again is their primary investment vehicle and “savings account.”As a result, statistics regarding the low level of savings in the United States are somewhat misleading.To find the law's text, see the instructions at Section (federal code).