To Qualify for the § 121 Exclusion, the Property Must

question 7

True/False

To qualify for the § 121 exclusion, the property must have been used by the taxpayer for the five years preceding the date of sale and owned by the taxpayer as the principal residence for the last two of those years.

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Definitions:

Debt Investments

Financial assets purchased with the expectation that the original funds will be returned over time with interest, typically including bonds or loans.

Government

The organized system through which a community or nation is ruled, involved in creating and enforcing laws.

Corporation Bonds

Long-term debt securities issued by corporations to finance their operations, acquisitions, or other significant projects.

Trading Security

A financial instrument that is bought and sold for short-term profit within the same accounting period.