I:12-42 Sale of a Principal Residence. On January 10, 2022, Kirsten married Joe. Joe sold his personal residence on October 25, 2021, and excluded the entire gain of $175,000. Although they had originally planned to live in the house that Kirsten had received as a gift from her parents in 2013, they decided to purchase a larger house, and Kirsten sold her house 60 days after their wedding and realized a $370,000 gain.

a. If they file a joint return, how much of the $370,000 gain may be excluded?

b. If Kirsten files as married filing separately, how much of the $370,000 gain may be excluded?