On February 1, 2020, Stephen (Who Is Single)sold His Principal

question 80

Multiple Choice

On February 1, 2020, Stephen (who is single) sold his principal residence (home 1) at a $100,000 gain. He was able to exclude the entire gain on his 2020 tax return. Stephen purchased and moved into home 2 on the same day. Assuming Stephen lives in home 2 as his principal residence until he sells it, which of the following statements is true?

• A)Under no circumstance will Stephen be allowed to exclude gain on home 2 if he sells home 2 in 2021.
• B)Stephen will be eligible to exclude gain on home 2 only if he waits until 2025 to sell it.
• C)In certain circumstances, Stephen may be able to exclude gain on home 2 even if he sells home 2 in 2020.
• D)None of the choices are correct.

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