Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

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Prepare for the Texas Real Estate SAE Exam with our educational quiz. Study using flashcards and multiple choice questions, each with detailed explanations to ensure you're ready to pass your exam!

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Married couples can be exempt from capital gains tax up to how much when selling their principal residences?

$250,000
$500,000
$350,000
$400,000

The correct answer is: $500,000

Married couples filing jointly can indeed be exempt from capital gains tax on the sale of their principal residence up to a limit of $500,000. This exemption applies if they meet certain conditions, such as having owned and lived in the home for at least two of the five years preceding the sale. This substantial exemption is designed to benefit homeowners by allowing them to retain more of their profit when selling their homes, reflecting the goal of the tax code to provide financial relief and encourage homeownership. The exemption amount is significantly higher for married couples than it is for single filers, which can explain why understanding the distinction is vital in real estate transactions. Single individuals can qualify for a limit of $250,000 in capital gains tax exemption. Knowing these figures is important for real estate professionals as it impacts clients' financial decisions regarding the sale of their homes.