If elderly person is selling their house and will use money to pay for nursing home care is there exemption from capital gains tax?

Main home (primary residence) 2 out of 5 year rule on the date of the sale of the primary residence.

Whatever use the money is used for from the sale of the house will not have any affect on the taxable amount being taxable income to you on your 1040 income tax return.

If the 2 out of 5 year rules are met the single elderly person would be able to exclude up 250000 of the long term capital gain from the capital gain tax.

Go to the IRS gov web use the search box for Publication 523 (2009), Selling Your Home

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