You join with three friends from college – each of you a singleton – and pool your cash to purchase a big old “fixer-upper” house. All four of your names are on the deed as equal (25%) co-owners. All of you immediately move in together and spend a memorable two+ years making improvements to the house and beautifying the landscaping with your green thumbs. Then you sell and make a very nice profit! What is the maximum § 121 exclusion from gross income that would (potentially) be available with respect to this sale? (a) $250,000 split four ways, because that is the maximum exclusion available with respect to the sale of any residence. (b) $250,000 split four ways, because none of the four of you are married filing jointly. (c) $500,000. (d) $1,000,000 ($250,000 each).
You join with three friends from college – each of you a singleton – and pool your cash to purchase a big old “fixer-upper” house. All four of your names are on the deed as equal (25%) co-owners. All of you immediately move in together and spend a memorable two+ years making improvements to the house and beautifying the landscaping with your green thumbs. Then you sell and make a very nice profit!
What is the maximum § 121 exclusion from gross income that would (potentially) be available with respect to this sale?
(a) $250,000 split four ways, because that is the maximum exclusion available with respect to the sale of any residence.
(b) $250,000 split four ways, because none of the four of you are married filing jointly.
(c) $500,000.
(d) $1,000,000 ($250,000 each).
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