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Fundamento

Principal residence capital gains exclusion

IRC §121 lets you exclude up to $250K of gain on the sale of your primary residence ($500K married filing jointly) — provided you've owned and lived in the home for at least 2 of the past 5 years.

Among the most generous tax breaks available to ordinary households. The 2-of-5-year rule is permissive: you don't have to live there continuously, you don't have to own it for 5 years, and the 2 years can be non-contiguous within the 5-year window.

Partial exclusions apply if you sell early for qualifying reasons: job change requiring 50+ mile move, health reasons, unforeseen circumstances (divorce, death of spouse, etc.). Pro-rated based on time of qualified residency.

The exclusion can be used repeatedly — once every 2 years. Some high-net-worth families chain a series of primary residences to harvest the exclusion across multiple homes over a working life. Timing the move matters more than most realize.

#§121#primary residence#exclusion

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