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.

---

Definitions:

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, resulting in market balance.

Profit

The financial gain that results when the revenues generated from business activities exceed the expenses, taxes, and costs incurred.

Competitive Market

A market structure characterized by many buyers and sellers, where all entities have little to no power to influence prices or market conditions.

Transaction Costs

Transaction costs are expenses incurred when buying or selling goods or services, including the costs of searching for information, negotiations, and enforcement of contracts.