Which act provides exclusion thresholds of up to $500k for married couples filing jointly and $250k for single homeowners?

• A. Internal Revenue Code
• B. American Taxpayer Relief Act
• C. Economic Stimulus Act
• D. Taxpayer Relief Act of 1997

Answer: (D)

The main idea is the special capital gains exclusion you can claim when selling a primary residence, and the specific dollar limits that apply to married couples versus single owners. This exclusion—up to 500,000 for married couples filing jointly and 250,000 for single homeowners—was created by the Taxpayer Relief Act of 1997. To use it, you must have owned and used the home as your main residence for at least two of the five years before the sale, and you can generally use the exclusion once every two years (with some limited exceptions for certain life events). The other acts listed are broader tax measures and did not establish these home-sale exclusion thresholds.