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(4T)ST 24 STAT > L2CAL ?243S:

TA@8@MPT ?243S pg. 1;8191 Co"e B1

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5A(4 24 A SAL 2F A -2M pg. 1918 192?0 

   @oint 'xemption on >?00 

   Two )asic 5e+irements Tax 9ayers .1/ 9rinciple 5esidence .2/ !or 2 o! last ? years"

MULTIPLE TRANSACTIONS:

• Taxpayer A owns a townhouse thar he uses as his principle place of residence for 2 full years, 1998 and

1999.

• In 2000 he buys a house and uses as his principle residence.

• A sells the TH in 2002 and excludes gain realized on its sale under section 121.

• A then sells the house in 2003—

o Cant get exclusion under 121 again (need two year period).

o Even though he meets 121(a) with respect to both properties, he does meet 121(b)(3)(A) for

another year

• Under 121(c)(2)(B) = the limitation is called off if the same or exchange was by reason of a change in

employment, health or unforeseen circumstances – you get a prorated exclusion.

• 121.c/.1/ – .allows !or .b/.3/ to not apply/

•

 

Formla !or 9ro

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Ta+ $;' $

After ta+ income $' $;' $'

SPC(AL )AT F2) 3((343S pg. 19