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Section 121 gain and losses - Research Paper Example
Finance & Accounting
Pages 6 (1506 words)
Research Paper, Finance and Accounting Name: Instructor: Course: Date: Introduction Internal Revenue Service (IRS) Section 121 The Internal Revenue Service is that agency set in the United States of America in charge of the process of collecting and enforcing taxes…
The headquarters of the agency is in Washington DC. It is the role of the agency to ensure that it administers the laws related to revenue and asses and collect taxes. The agency has different sections guiding its operations. This paper in particular will explore at section 121. In its discussion, the paper will include the rules and exceptions which are involved in this paper. It will dig further to the presentation of real world examples of the section. (Yancey 2004) Section 121 offers the provision to every taxpayer filling the existing federal tax returns an entire exclusion on any kind of capital gains tax involved in selling their primary residence. The agency on an bi-annual basis provides $250,000 for persons filling single returns and also $500,000 for those married couples filing joint returns is given when the property in question represents their principal residence and when the taxpayer has been living in the home for a duration of at least two or five years. Capital Gains Tax The capital gain tax is imposed when one sells the primary residence at a price higher than the original purchase price. ...
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