Darren (Single)purchased a Home on January 1, 2016, for $470,000

Essay

Darren (single)purchased a home on January 1, 2016, for $470,000. Darren lived in the home as his primary residence until January 1, 2018, when he began using the home as a vacation home. He used the home as a vacation home until January 1, 2019. (He used a different home as his primary residence from January 1, 2018, to January 1, 2019.)On January 1, 2019, Darren moved back into the home and used it as his primary residence until January 1, 2020, when he sold the home for $540,500. What amount of the $70,500 gain Darren realized on the sale must he recognize for tax purposes in 2020?