Question

On July 11, 2019, Nicholas's mobile home was totally destroyed in a disaster. The area was designated by the President to be a disaster area. On November 15, 2019, Nicholas's insurance company reimbursed him $12,000 for the mobile home. If Nicholas has a gain, when does the replacement period for the mobile home end? 12/31/2021. 12/31/2022. 12/31/2023. 12/31/2024..

Answer 1

The correct answer is 31/12/2021

If an individual has a gain because his/her main home was destroyed, they can generally exclude the gain from their income as if they had sold or exchanged their home. To exclude a gain, they must generally have owned and lived in the property as their main home for at least 2 years during the 5-year period ending on the date it was destroyed.

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