Which of the Following Is Not True of Principal Residences

question 42

Multiple Choice

Which of the following is not true of principal residences?

• A)"Principal residence" can refer only to property which the taxpayer owns.
• B)A taxpayer cannot occupy two principal residences at the same time.
• C)If a taxpayer rents out his or her former principal residence while trying to sell it, it may still qualify as the taxpayer's principal residence for purposes of § 121.
• D)A taxpayer can exclude gain only on the sale of one property every two years.

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Definitions:

Nudging

A concept in behavioral economics wherein indirect suggestions and positive reinforcements influence behaviors and decision-making.

Behavioral Economics

A subset of economics that analyzes how psychological, social, cognitive, and emotional factors influence economic decisions of individuals and institutions.

Neoclassical Economists

Economists specializing in examining the allocation of goods, outputs, and how income is distributed within markets, driven by the dynamics of supply and demand.

Simplifying Assumptions

Theoretical conditions applied to models to make them more manageable and easier to understand, often by ignoring real-world complexity.