Section 121

The section of the Internal Revenue Code that deals with exclusion of gain from the sale of a principal Residence after May 6, 1997. An unmarried individual may exclude from income up to $250,000 of gain realized on the sale or exchange of a principal residence. The seller must have owned and occupied the residence for a total of at least two of the five years before the sale. Exclusion may be used on a continuing basis but not more often than once every two years. Exclusion may be up to $500,000 for married individuals who meet certain tests.