RIA RESEARCH EXERCISE Use the RIA Checkpoint database to answer the following

questions. Cut and paste the relevant Internal Revenue Code and Treasury Regulation section(s) into your solution and explain how the authority answers the tax issue in question. Give the most specific citation applicable [e.g., Sec. 168(a)(1)] that answers the question. NOTE: If the answer can be found in both the code and regulations, you must provide both authorities.

1. Jerry and Jane are married on March 18, 2011. They use Jane’s house as their residence and sell Jerry’s house on April 27, 2011 for $420,000. Jerry had purchased the house in 2004 for $120,000.

a. What code section and/or regulation allows the exclusion of gain from the sale of a taxpayer’s residence?

b. What code section and/or regulation provides the general limit on the amount of gain that can be excluded?

c. What code section and/or regulation further limits the amount of gain that Jerry and Jane can exclude on their joint return?