Claimed full exclusion under Code section

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Reference no: EM134038987

Question

When Jan, a single taxpayer, sold her New Jersey residence on January 15, 2019, she claimed a full exclusion under Code section 121 in her 2019 tax return. She owned her home from 2/15/2015 through 1/15/2019. And, she lived full-time in the home from 2/15/2015 to 2/16/2018. She previously bought another residence in New York in 2015 and lived there from 1/1/2011 until 2/14/2015. And then, after leaving her New Jersey home on 2/16/2018 she lived in the New York home from 2/16/2018 through 2/22/2019. She eventually sold her New York home on 2/25/2020. She claimed the Code Section 121 exclusion from gain on a sale of her New York principal residence on her 2020 tax return. Which of the following statements is correct?

a. Jan doesn't qualify for the exclusion on sale on her New York home because she used the Section 121 exclusion within 2 years of the sale of her New Jersey home.

b. Jan doesn't qualify for the exclusion on sale on her New York home because the Code section 121 exclusion does not apply to any sale or exchange by the taxpayer if, during the 2-year period ending on the date of such.

Reference no: EM134038987

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