Final answer:
Taxpayers meeting certain requirements may be allowed to exclude at least a portion of gain realized on the sale of a principal residence. This exclusion is known as the home sale exclusion or the Section 121 exclusion.
Step-by-step explanation:
In the United States, taxpayers meeting certain requirements may be allowed to exclude at least a portion of gain realized on the sale of a principal residence. This exclusion is known as the home sale exclusion or the Section 121 exclusion.
To qualify for the home sale exclusion, taxpayers must meet certain criteria. For example, they must have owned and used the property as their principal residence for at least two out of the five years preceding the sale. Additionally, there are limitations on the amount of gain that can be excluded.
For more information on the specific requirements and limitations of the home sale exclusion, taxpayers should consult the Internal Revenue Service (IRS) or a tax professional.