Principal Residence Exception

Exclusion from capital gain tax on the sale of principal residence of $250,000 for individual taxpayers and $500,000 for couples, filing jointly, under IRS Section 121. Property must have been the principal residence of the taxpayer(s) 24 months out of the last 60 months. In the case of a dual-use property, such as a ranch, retail store, duplex, or triplex, the taxpayer can defer taxes on the portion of the property used for business or investment under Code Section 1031 and exclude capital gain on the portion used as the primary residence under Section 121.