Jason and Alicia Johnston purchased a home in Austin, Texas, for $500,000. They moved into the home on September 1, year 0. They lived in the home as their primary residence until July 1 of year 5, when they sold the home for $800,000. What amount of the $300,000 gain are they allowed to exclude? (Assume married filing jointly.)
What will be an ideal response?
$300,000
They qualify to exclude up to $500,000 of gain.
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