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I've asked this question in another forum and received conflicting answers. Maybe someone here can be a tie-breaker.

Situation: Over 65, sold principal residence, married and filing jointly, and need to know whether to declare sale proceeds.

The responses I received were:

"If the net gain was over $250k,($500K if married and filing jointly) the sale must be reported. If the sale is reportable, and there is a gain, you take the exemption in Sch D, col f (description is "Sec 121 Exclusion" (enter a negative number). The exclusion is the lesser of the gain or $250k($500K if married and filing jointly)."

"Yeah but... according to IRS Pub 523, unless there is a taxable gain on a sale of a principal residence the transaction should not be reported even if a 1099-S is received."


Which answer is correct?

~aj
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