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).

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.