1. (a) One-time exclusion of gain from gross income — Arkansas Code § 26-51-305(a) [repealed]. A taxpayer may make a one-time (i.e., once-in-a-lifetime) election to exclude from his or her gross income the gain realized from the sale or exchange of a home if the following conditions are met:

   1. (1) The taxpayer has reached the age of fifty-five (55) before the date of the sale or exchange; and
   2. (2) During the five-year period ending on the date of the sale or exchange, the home was owned and used by the taxpayer as his or her principal residence for a period of (or periods aggregating) three (3) years or more.

2. (b) One-time exclusion of gain from gross income — Amount excludable — Arkansas Code § 26-51-305(b) [repealed].

   1. (1)

      1. (A) The maximum amount of gain excludable from gross income under this section is one hundred twenty-five thousand dollars ($125,000).
      2. (B) In the case of a separate return filed by a married taxpayer, the maximum amount allowable shall be sixty-two thousand five hundred dollars ($62,500) for such taxpayer.
   2. (2) The exclusion from gross income provided by this part can only be taken once by a taxpayer after reaching the age of fifty-five (55).
   3. (3) After this election has been properly taken by a taxpayer, it shall not be available to the taxpayer again.
   4. (4) However, refer to subsection (c) of this section regarding revocation of the election.

3. (c) One-time exclusion of gain from gross income — Example — Arkansas Code § 26-51-305(c) [repealed].

   1. (1) An election to exclude from gross income the gain realized from the sale or exchange of a home may be made or revoked at any time before the period expires for filing a claim for credit or a refund of income tax paid for the tax year in which the sale or exchange occurred.
   2. (2) If the taxpayer making the election or revocation is married, the taxpayer's spouse must join in the election or revocation. Example: A taxpayer well above the age of fifty-five (55) sold his long- time principal place of residence in 1994. The taxpayer realized fifty-five thousand dollars ($55,000) in gain from the sale. In 1995, the taxpayer made his once-in-a-lifetime election to exclude the fifty-five thousand dollars ($55,000) of gain from his gross income. The taxpayer now wishes to revoke this election, as he anticipates realizing a larger gain on the pending sale of his current residence. Pursuant to Arkansas Code § 26-18- 306(i)(1), the taxpayer must file his revocation with the Department of Finance and Administration within three (3) years from the date his 1994 Arkansas income tax return was filed or two (2) years from the time his 1994 Arkansas income tax due was paid, whichever period expires later.

4. (d) One-time exclusion of gain from gross income — Husband and wife — Arkansas Code § 26-51-305(d)(1) [repealed]. With respect to excluding from gross income the gain realized from the sale or exchange of a home, both a husband and wife shall be treated as satisfying the age, holding, and use requirements of subsection (a) of this section if all of the following requirements are met:

   1. (1) The home is held by the husband and wife as either:

      1. (A) Joint tenants; or
      2. (B) Tenants by the entirety;
   2. (2) The husband and wife file an Arkansas joint return or "separate on same" return for the tax year in which the home was sold or exchanged; and
   3. (3) At least one (1) of the spouses satisfies the age, holding, and use requirements of subsection (a) of this section with respect to the home.

Codification Notes: Arkansas Code § 26-51-305 was repealed by Acts 1997, No. 328, § 8.