Essay
Melissa,age 58,marries Arnold,age 50,on June 1,2010.Melissa decides to sell her principal residence on August 1,2010,which she has owned and occupied for the past 30 years.Arnold has never owned a house.However,while he was married to Kelly who died 6 months prior to his marriage to Melissa,Kelly used the § 121 election on the sale of her residence in January 2008 to reduce her realized gain from $123,000 to $0.Kelly used the sales proceeds to pay off Arnold's gambling debts.Can Melissa elect the § 121 exclusion on the sale of her residence? What is the maximum § 121 exclusion available to Melissa and Arnold if they file a joint return?
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Melissa is eligible for a maximum § 121 ...View Answer
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