When selling a home as a single filer, how much gain can be excluded from income?

When selling a home, a single filer can exclude up to $250,000 of capital gains from income under the IRS Section 121 exclusion. To qualify for this exclusion, the homeowner must have owned and used the home as their primary residence for at least two of the five years prior to the sale. This provision provides significant tax relief for individuals selling their homes, allowing many to retain a substantial portion of their profit without facing taxation.

The amount exceeds the exclusion available to married couples filing jointly, which is $500,000. This difference is a key point of understanding, as it highlights that single filers have a specific threshold for exclusion that is designed to assist individuals in managing their home sale profits. The figures of $200,000, $300,000, and $400,000 do not accurately reflect current law regarding gain exclusion for home sales by single filers, reinforcing the correct choice of $250,000.