What Is A Principal Residence Exclusion (Section 121) In SFR Investing?
Section 121 provides exclusion from capital gains tax on sale of principal residence — $250K for individuals, $500K for couples.
IRC Section 121 provides capital gains tax exclusions of $250,000 for individual taxpayers and $500,000 for couples filing jointly on the sale of a principal residence. The property must have served as principal residence for 24 of the last 60 months.
Dual-use properties can combine Section 121 exclusion with 1031 deferral strategies for maximum tax benefit.
The information in this article is for educational purposes only and does not constitute tax, legal, financial, or investment advice. Consult a qualified professional before making investment decisions.