Question

In 2019, Colin and Laura sold their house for $990,000. They paid $40,000 in expenses so their proceeds are $950,000. They bought the house in 2013 and paid $300,000 for the home and spent $30,000 to add on a garage so their basis would be $330,000. They subtract $330,000 from $950,000 to find their gain equals $620,000. When filing their joint income tax return, if all of other conditions are met, what is the maximum amount Colin and Laura could exclude from the sale of their home

Answer 1

the total maximum amount that excluded is $500,000

Step-by-step explanation:

The computation of the maximum amount that could be excluded is as follows:

In the case of the gain on sale of personal residence of taxpayer the amount of $250,000 would be considered as an exclusion other than married filing

But in the case of married filling the above amount should be doubled

Therefore the total maximum amount that excluded is $500,000