Which of the Following Statements Is False with Regard to the Ownership

question 49

Multiple Choice

Which of the following statements is false with regard to the ownership and use tests under Sec.121?

• A)The taxpayer must be occupying the residence at the time of the sale in order for Sec.121 to apply.
• B)If a principal residence is sold before satisfying the ownership and use tests,part of the gain may be excluded if the sale is due to a change in employment,health,or unforeseen circumstances.
• C)For purposes of the two-year ownership rule,a taxpayer's period of ownership includes the period during which the taxpayer's deceased spouse owned the residence.
• D)When a taxpayer receives a residence from a spouse or an ex-spouse incident to a divorce,the taxpayer's period of owning the property includes the time the residence was owned by the spouse or ex-spouse.

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Definitions:

Transaction Costs

The expenses incurred when buying or selling a good or service, which can include search, bargaining, and enforcement costs.

Marginal Social Benefit

The additional benefit to society resulting from one more unit of a good or service being produced and consumed.

Marginal Social Cost

The total cost society bears for the production of an additional unit of a good or service, including both external and private costs.

Coal Mine Pollution

Environmental contamination resulting from the operation of coal mines, including air and water pollution.