Exclusion from gain can be used no more than ________.

• A. Once every 2 years
• B. Annually
• C. Every 5 years
• D. Once in a lifetime

Answer: (A)

Exclusion from gain on the sale of a principal residence is subject to a timing rule to prevent frequent use. You may claim the exclusion only if you haven’t claimed it in the two-year period ending with the sale date. That means you can use the exclusion no more than once in any two-year window. Meeting the ownership and use tests (own and live in the home as your main residence for at least two of the last five years) is also required to qualify, but the question focuses on how often you can claim it. So the correct understanding is that it can be used once every two years.