All of the Following Statements Are True with Regard to Personal

question 68

Multiple Choice

All of the following statements are true with regard to personal residences except

• A)temporarily renting property that was formerly the taxpayer's principal residence does not automatically preclude the use of Sec.121.
• B)to qualify for favorable tax treatment under Sec.121,the residence must be either the taxpayer's principal residence or a secondary residence.
• C)in the case of married taxpayers,an individual may claim the exclusion even if the individual's spouse used the exclusion within the past two years.
• D)houseboats,house trailers,and condominium apartments may qualify as a principal residence.

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Definitions:

Supply Curve

A graphical representation of the relationship between the price of a good and the amount of it suppliers are willing to offer for sale, holding other factors constant.

Tax System

The organized way in which a government levies taxes on its citizens and companies to generate revenue.

Marginal Incentives

Additional rewards or penalties that influence the benefits or costs of engaging in one more unit of an action.

Inequity

The lack of fairness or justice in situations, treatments, or conditions, often used in the context of social or economic disparities.