Timmy and Tammy, boyfriend and girlfriend (but not married and with no plan to marry), have co-owned (50-50) and lived together in a home in Dallas for five years. Now they want to sell because theyve decided to move to Alaska. They tell you, their CPA, that they anticipate around $600,000 total profit on the sale. You advise them that they

(a) must get married before they sell in order to maximize the 121 exclusion.

(b) must get married by year-end in order to maximize the 121 exclusion.

(c) will pay no tax on a total of $250,000 of the gain, split evenly between them on their respective single tax returns.

(d) will pay no tax on a total of $500,000 of the gain, split evenly between them, on their respective single tax returns.

Choose the answer you believe to be correct and explain / defend your choice.