A Taxpayer Who Otherwise Meets the Ownership and Use Tests

question 31

True/False

A taxpayer who otherwise meets the ownership and use tests may not be allowed to exclude all of her realized gain if the taxpayer has nonqualified use of the home before selling.

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Definitions:

Trading Debt Securities

The act of buying and selling debt instruments, such as bonds, in the financial markets as a means of investment or speculation.

Fair Value Adjustment

An accounting process to adjust the book value of an asset or liability to its fair value.

Unrealized Gain

The unrealized gain from an investment that hasn't been converted into cash.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, without controlling those policies.