Single taxpayers can exclude up to $250,000 of capital gains on the sale of a home, and married taxpayers filing jointly can exclude $500,000.
Taxpayers are eligible for the exclusion if they have owned and used a home as their main home for a period aggregating at least two years out of the five years prior to its date of sale. The exclusion is allowed each time that you sell a primary residence but no more than once every two years.
For more information, see http://www.irs.gov/taxtopics/tc701.html
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