I have a couple who file their taxes together (MFJ).

They bought their first house in Sep/2015, for the amount of $310,000.00 and they sold it in Jan/2019, for the amount of $405,000.00. Selling expenses and closing cost were $16,000.00. This sale wasn't reported in their 2019 Income Taxes.

They bought their second home in Nov/2019, for the amount of $474,900.00. they gave a down payment of $70,000.00. This second property was sold on March/26/2021, for the amount of $585,500.00. The selling expenses and closing cost were $26,500.00

Question #1 Do they qualify to take the $500,000.00 exclusion?

Question #2 What other expenses can be declare on line 4 of the Home Sale Worksheet?

(Home Sale Worksheet) Line 4.- What does Seller Paid Loan Fees Mean?