Is the principal residence exemption applicable to rental income and expenses?

When it comes to the principal residence exemption, it is important to note that it generally does not apply to rental income and expenses. The principal residence exemption is typically used to exempt any capital gains tax that may arise from the sale of a home that is considered to be the taxpayer's principal residence.

Rental income and expenses are usually considered to be part of an investment property, which is distinct from a taxpayer's principal residence. As such, the principal residence exemption would not typically apply to rental income or expenses.

It is important to consult with a tax professional or advisor for specific guidance on how the principal residence exemption may apply to your individual tax situation.