The Ownership Test for Excluding Gain on the Sale of a Principal

question 65

True/False

The ownership test for excluding gain on the sale of a principal residence requires the taxpayer to have owned the property for three or more years during the five-year period ending on the date of sale.

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Definitions:

Price Ratio

Price Ratio is a comparative metric that divides the price of one good, asset, or commodity by another, often used to assess relative value or performance.

Diamond/Water Paradox

A paradox stating that (1) the things with the greatest value in use frequently have little or no value in exchange and (2) the things with the greatest value in exchange frequently have little or no value in use.

Value in Use

The utility of a product based on its ability to fulfill the needs of the user.

Value in Exchange

The worth of a good or service in comparison to other goods or services in the context of trade or commerce.