Since we are talking about IRS tax code today, I will start this post out with a quick disclaimer that I am not a CPA, or Tax Attorney, or other tax professional. Please don't take this information as tax advice as every persons situation will vary and tax laws change frequently, This is a compilation of information that I gathered while doing my own research on selling my primary residence.
With that out of the way, let's answer the question; What is the Section 121 exclusion? Section 121 of the Internal Revenue Code allows a taxpayer to exclude up to $250,000 ($500,000 if filing a joint return) of the gain from the sale of property owned and used as a principal residence for at least two of the five years before the sale. This can be a massive tax savings when selling a property that has appreciated greatly in value.
Here are some of the fine print details of Section 121:
As always, please reach out to me via email or the comments section below with any questions or to discuss how we can work together to grow our financial futures through real estate investments.