What is the maximum amount that can be excluded from taxable income for a home sale for a married couple?

When a married couple sells their home, they can exclude a significant amount of capital gains from their taxable income. The tax code allows married couples filing jointly to exclude up to $500,000 of capital gains on the sale of their primary residence. This provision applies if they have owned and used the home as their primary residence for at least two of the five years preceding the sale.

This exclusion is designed to support homeowners by providing a tax break when they sell their homes, which encourages homeownership and investment in residential property. Therefore, the correct answer reflects this maximum exclusion amount, allowing couples to retain more of the profits from the sale of their home without being taxed on those amounts.

Understanding this exclusion is essential for financial planning related to real estate transactions, especially for those looking to capitalize on the equity they have built in their homes.