Danielle, a Calendar Year Taxpayer, Lists Her Principal Residence with a Realtor

question 2

Multiple Choice

Danielle, a calendar year taxpayer, lists her principal residence with a realtor on February 7, 2019, enters into a contract to sell on July 12, 2019, and sells (i.e., the closing date) the residence on August 1, 2019.The realized gain on the sale is $225,000.Which date is the appropriate ending date in determining if the residence has been owned and used by the Danielle as the principal residence for at least two years during the prior five-year period?

• A)February 7, 2019.
• B)July 12, 2019.
• C)August 1, 2019.
• D)December 31, 2019.

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Definitions:

Cash Flow

The total amount of money being transferred into and out of a business, especially affecting liquidity and overall financial health.

Bid Prices

The highest price that a buyer is willing to pay for a security or commodity.

Break-Even

The point at which total costs and total revenue are equal, resulting in no net loss or gain for a business.

Required Return

The minimum return an investor expects to achieve by investing in a particular asset or project.