period for purposes of this section shall not exceed $500,000 ($250,000 in the case of a married individual filing a separate return or unmarried individuals filing separate returns for the same property). (3) Acquisition indebtedness The term acquisition indebtedness means any indebtedness which— (A) is incurred in acquiring, constructing, or substantially improving any qualified residence of the taxpayer, and (B) is secured by such residence. Such term also includes any indebtedness secured by such residence resulting from the refinancing of indebtedness meeting the requirements of the preceding sentence (or this sentence), but only to the extent the amount of the indebtedness resulting from such refinancing does not exceed the amount of the refinanced indebtedness. (4) Home equity indebtedness (A) In general The term home equity indebtedness means any indebtedness (other than acquisition indebtedness) secured by a qualified residence to the extent the aggregate amount of such indebtedness does not exceed— (i) the fair market value of such qualified residence, reduced by (ii) the amount of acquisition indebtedness with respect to such residence. (B) Limitation The aggregate amount treated as home equity indebtedness for any period shall not exceed $100,000 ($50,000 in the case of a married individual filing a separate return). (c) Special rules For purposes of this section— (1) Qualified residence The term qualified residence means— (A) the principal residence (within the meaning of section 121) of the taxpayer, and (B) 1 other residence of the taxpayer which is selected by the taxpayer for purposes of this subsection for the taxable year and which is used by the taxpayer as a residence (within the meaning of section 280A(d)(1)). (2) Married individuals filing separate returns If a married couple does not file a joint return for the taxable year— (A) such couple shall be treated as 1 taxpayer for purposes of paragraph (1), and (B) each individual shall be entitled to take into account 1 residence unless both