Illinois Real Estate Practice Exam

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Prepare for the Illinois Real Estate Test. Practice with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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How much capital gains can an unmarried individual exclude when selling a house they lived in for the last five years?

$500,000
$100,000
$250,000
$1,000,000

The correct answer is: $250,000

An unmarried individual can exclude up to $250,000 of capital gains when selling a primary residence, provided they have owned and lived in the property for at least two of the five years preceding the sale. This exclusion is designed to help homeowners realize a profit from their investment without incurring significant tax liabilities, thus promoting home ownership and housing stability. For someone to qualify for this exclusion, they must not have claimed another capital gains exclusion for another home sale in the two years prior to the sale of the current home. This provision is crucial for individuals looking to maximize their financial return on a home sale while minimizing their tax burden. The other options reflect misunderstandings of the current tax rules. The amounts of $500,000 and $1,000,000 are more relevant to married couples filing jointly, who can exclude up to $500,000 in capital gains. The $100,000 figure does not correlate with any standard exclusion rule in real estate transactions for primary residences. Consequently, the correct exclusion limit for an unmarried taxpayer is indeed $250,000.