A Taxpayer Whose Principal Residence Is Destroyed in a Fire

question 44

True/False

A taxpayer whose principal residence is destroyed in a fire can use both the § 121 (sale of residence gain exclusion) and the § 1033 (involuntary conversion postponement of gain) provisions.

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Definitions:

Supplies

Materials and goods held for use in the production process or office operations, often considered short-term assets in financial accounting.

GST and PST

Taxes applied to the sale of goods and services; GST is a federal tax in Canada, while PST is a provincial sales tax.

Sold

The act of exchanging a product or service for money or other consideration.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, assigning weights to each number.