Jeremy breaks down the complex rules surrounding Section 121's capital gains exclusion for home sales, using the Weber v. Commissioner tax court case to illustrate how taxpayers can lose out on excluding up to $500,000 in gains. The episode covers the critical two-out-of-five year ownership and use tests, explains how rental conversions can disqualify you from the exclusion, and details the partial exclusion exceptions for employment changes, health issues, and unforeseen circumstances. Understanding these nuances is essential since home sales often represent the largest financial transactions in taxpayers' lives.

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