How to Use the Section 121 Home Sale Exclusion Checker
Korea has a specific "temporary two-home" rule: if you buy a new home before selling your old one, you can still get a tax-free sale on the old home as long as you sell it within 3 years of buying the new one. The U.S. does not have a matching timing rule tied to owning a second home — federal tax law doesn't penalize you simply for owning two homes at once. Instead, the relevant U.S. rule is the Section 121 primary residence exclusion, which this tool checks.
Under Section 121, you can exclude up to $250,000 of gain ($500,000 if married filing jointly) from the sale of your main home if you meet two tests: you owned the home for at least 24 months and used it as your primary residence for at least 24 months, both within the 5 years before the sale. These 24 months don't have to be consecutive, and the ownership and use periods don't have to overlap perfectly.
There's also a timing limit that plays a similar role to Korea's 3-year window: you generally can't claim this exclusion more than once every 2 years. So if you already excluded gain on a different home sale recently, buying and selling again quickly won't qualify for a second exclusion — you'd owe capital gains tax on the new sale instead.
Frequently Asked Questions
No. Korea's rule lets someone who buys a new home before selling their old one still qualify for a tax-free sale if they sell the old home within 3 years. The U.S. has no matching timing rule tied to buying a second home — this tool checks the actual U.S. equivalent, the Section 121 primary residence exclusion.
To exclude gain from tax under Section 121, you must have owned and used the home as your primary residence for at least 24 months (2 years) out of the 5 years before the sale. The 24 months don't need to be consecutive.
Generally no. You can only claim the Section 121 exclusion once every 2 years. If you excluded gain on a different home sale within the past 2 years, you typically cannot exclude gain on this sale, even if you meet the ownership and use tests.