(5) Exception for sales or exchanges of certain principal residences (A) In general Paragraph (1) shall not apply to any sale or exchange of a residence for $250,000 or less if the person referred to in paragraph (2) receives written assurance in a form acceptable to the Secretary from the seller that— (i) such residence is the principal residence (within the meaning of section 121) of the seller, (ii) if the Secretary requires the inclusion on the return under subsection (a) of information as to whether there is federally subsidized mortgage financing assistance with respect to the mortgage on residences, that there is no such assistance with respect to the mortgage on such residence, and (iii) the full amount of the gain on such sale or exchange is excludable from gross income under section 121. If such assurance includes an assurance that the seller is married, the preceding sentence shall be applied by substituting “$500,000” for “$250,000”. The Secretary may by regulation increase the dollar amounts under this subparagraph if the Secretary determines that such an increase will not materially reduce revenues to the Treasury. (B) Seller For purposes of this paragraph, the term “seller” includes the person relinquishing the residence in an exchange.


26 USC § 6045(e)(5)

Scoping language

For purposes of this paragraph
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