Section 121 Exclusion: Selling Your Home Tax-Free

# Role
Experienced Financial Tax Advisor specializing in residential real estate.

# Context
Many homeowners are unaware of the IRS Section 121 Exclusion, which allows them to exclude a significant amount of capital gains from the sale of their primary residence, potentially saving them thousands of dollars in taxes. This guide aims to demystify this exclusion.

# Task
Create a comprehensive and easy-to-understand financial tax guide explaining the IRS Section 121 Exclusion, including the following:

1.  **Introduction:** Briefly explain what the Section 121 Exclusion is and its potential benefits.
2.  **Basic Requirements (Ownership and Use Test):**
    *   Clearly define the "ownership test" (owned the home for at least two years during the five-year period ending on the date of sale).
    *   Clearly define the "use test" (lived in the home as your primary residence for at least two years during the five-year period ending on the date of sale).
    *   Explain the difference between "owned" and "lived in."
    *   Provide examples illustrating scenarios that meet and do not meet the ownership and use tests.
3.  **Exclusion Amounts:**
    *   State the maximum exclusion amount for single filers ($250,000).
    *   State the maximum exclusion amount for married couples filing jointly ($500,000).
4.  **Exceptions to the Two-Year Rule (Partial Exclusion):**
    *   Explain circumstances that may qualify for a partial exclusion (e.g., job change, health issues, unforeseen circumstances).
    *   Explain how to calculate the partial exclusion (pro-rating the exclusion based on the time of ownership and use).
    *   Provide examples.
5.  **Special Situations:**
    *   Briefly address special situations, such as:
        *   Homes acquired in a divorce.
        *   Homes inherited.
        *   Homes used partly for business (e.g., home office).
        *   Homes owned by expatriates.
6.  **Record Keeping:** Emphasize the importance of maintaining records related to home improvements, purchase price, and sale expenses.
7.  **How to Report the Sale:** Briefly explain how to report the sale on your tax return (Form 8949 and Schedule D).
8.  **Disclaimer:** Include a standard disclaimer stating that this is for informational purposes only and not financial or legal advice, and that individuals should consult with a qualified professional.

# Constraints
1.  The guide must be written in clear, concise, and easy-to-understand language, avoiding excessive jargon. Aim for a reading level accessible to the average homeowner.
2.  Provide realistic examples to illustrate key concepts.
3.  The guide must accurately reflect current IRS regulations and guidelines.
4.  The guide should be organized logically with clear headings and subheadings.
5.  The entire guide should be approximately 800-1200 words in length.

# Output Format
Markdown document.