Which of the Following Statements Regarding the Exclusion of Gain

question 83

Multiple Choice

Which of the following statements regarding the exclusion of gain on the sale of a principal residence is correct?

• A) A taxpayer may not exclude gain if the taxpayer is renting the residence at the time of the sale.
• B) A taxpayer may simultaneously own two homes that are eligible for the home sale exclusion.
• C) A taxpayer must be living in a residence at the time it is sold to qualify for the exclusion.
• D) For a married couple to qualify for the $500,000 exclusion, both spouses must meet the ownership and use tests.

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Definitions:

Split-Off Point

The stage in a process where different products have been sufficiently processed and can be recognized as distinct goods.

Weighted Average Method

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the weighted average cost of all items available for sale during the period.

Joint Costs

The costs incurred in the process of producing two or more joint products before the point at which the products become separately identifiable.

Split-Off Point

In a production process, the stage at which jointly processed products become individually identifiable and able to be separated into distinct products.