Internal Revenue Service (I.R.S.)

Revenue Ruling

Section 121 - Gain From Sale or Exchange of Residence of Individual Who Has Attained Age 65

26 CFR 1.121-1: Limitations.

A brother and sister sell their jointly owned residence. They each qualify in all respects to receive the benefits of section 121 of the Internal Revenue Code of 1954, relating to the exclusion from income of gain from the sale or exchange of a residence of an individual who has attained the age of 65. 

Held, each is entitled to exclude from his income for income tax purposes that portion of his gain which bears the same ratio to the total amount of gain attributable to his undivided interest as $20,000 bears to his adjusted sales price.  If the adjusted sales price of each undivided interest is not in excess of $20,000, each taxpayer is entitled to exclude his whole gain from income.