Question

Capital gains exclusions of _________ for single persons and _________ for married couples are allowed every ____ years, provided the home was used as a primary residence for ______ out of the last _____ years

a) $100,000; $200,000; 5; 2
b) $250,000; $500,000; 7; 3
c) $500,000; $1,000,000; 10; 5
d) $750,000; $1,500,000; 15; 7

Answer 1

The capital gains exclusions for single persons and married couples are $250,000 and $500,000 respectively, allowed every 7 years when the home is used as a primary residence for 3 out of the last 5 years.

Step-by-step explanation:

The correct answer is b) $250,000; $500,000; 7; 3.

Capital gains exclusions of $250,000 for single persons and $500,000 for married couples are allowed every 7 years, provided the home was used as a primary residence for 3 out of the last 5 years.

This means that if a single person sells their primary residence and makes a capital gain of up to $250,000, they would not have to pay taxes on that gain. Similarly, for married couples, the exclusion limit is $500,000.