Understanding the Common §121 “Gotchas” When people sell their home, there’s often an assumption that the gain is automatically tax-free. In many cases, that’s true. But once you start layering in real-life situations like moving, renting, or working from home, the rules become more nuanced. There are a few key areas that tend to come into play: The basic home sale exclusion rules under IRC §121 Periods where the home was not used as a primary residence Renting part or all of