Which of the Following Rules Regarding the Tax Treatment of a Principal

question 6

Multiple Choice

Which of the following rules regarding the tax treatment of a principal residence is FALSE?

• A)If a taxpayer only owns one residence, the 'principal residence formula' reduces any capital gain on the sale to nil.
• B)When a taxpayer owns more than one residence, the decision to designate a particular property as the 'principal residence' occurs at the time of sale.
• C)A capital loss cannot be realized on the sale of a principal residence.
• D)Properties can be designated to each married or common-law partner in a family for the purpose of reducing the gains on the sale of two principal residences.

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Emergency Situation

A critical or urgent circumstance that requires immediate action.

Presence Or Absence

A phrase indicating whether a particular factor, condition, or entity exists or is lacking in a given context.

Bystander Effect

A social psychological phenomenon in which individuals are less likely to offer help to a victim when other people are present.

Increased Significantly

A term used to describe a situation where a change or difference is both statistical and meaningful in magnitude, indicating a departure from chance.