Chapter 11 – Other Exclusions

Chapter 11 – Other Exclusions - Chapter 11...

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Chapter 11 – Other Exclusions Gain from Sale of Personal Residence Income Earned Abroad Higher Education Costs Municipal Bond Income
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Gain from Sale of Personal Residence Old rules: Gain on sale of personal primary residence could be deferred (not excluded) from income, if within a certain time period, you purchased a replacement home that is just as expensive as the one you sold. Once in a lifetime exclusion of $125,000 for those over 55. Deferred gain reduced the basis of the new home.
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Gain from Sale of Personal Residence New rules (§121): up to $500,000 of gain from the sale of primary personal residence can be excluded from gross income permanently ($250,000 for single people). Effective May 7, 1997 Must have lived in the house as your primary residence for at least 2 of the last 5 years. Only allowed every 2+ years.
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Gain from Sale of Personal Residence Exceptions to the 2+ year rule: Job related sales Medical related sale Unforseen circumstance Example of a recent ruling
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Chapter 11 – Other Exclusions - Chapter 11...

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