The "over 55 home sale exemption":
Answer: (a)
The "over 55 home sale exemption" refers to Section 121 of the Internal Revenue Code, which allows individuals over 55 years old up to $250,000 tax-free principal residence sale capital gains ($500,000 for married couples). To qualify, the sellers must have owned and occupied their principal residence an aggregate two of the five years before the home sale. Occupancy need not be continuous. Nor must the residence be the seller's principal residence at the time of sale. This tax exemption can be used multiple times with different residences, but cannot be used more frequently than once every 24 months. The exemption does not require that the seller reinvest the proceeds in another residence. Special use and ownership rules apply in the case of a deceased spouse and in the case of divorce.
