Which of the Following Statements Regarding Home-Related Transactions Is Correct

question 41

Multiple Choice

Which of the following statements regarding home-related transactions is correct?

• A) If a taxpayer converts a home from personal use to rental use, the basis of the rental property is the greater of the basis of the property at the time of the conversion or the fair market value of the property at the time of the conversion.
• B) If a taxpayer uses a residence as a rental property (and deducts depreciation expense against the basis of the property) and as a personal residence the taxpayer will not be allowed to exclude the entire amount of gain even if the taxpayer otherwise meets the ownership and use tests and the amount of the gain is less than the limit on excludable gain.
• C) If a taxpayer converts a rental home to a principal residence, the taxpayer's basis in the principal residence is the greater of the basis of the home at the time of the conversion or the fair market value at the time of the conversion.
• D) None of these statements are correct.

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Definitions:

Primary Reinforcer

An innately reinforcing stimulus like food or drink, which does not require learning to become pleasurable.

Secondary Reinforcer

A stimulus that becomes reinforcing through its association with a primary reinforcer, not through its own inherent value.

Secondary Reinforcer

A stimulus that gains reinforcing qualities through being linked with a primary reinforcer.

Positive Reinforcer

A stimulant that, when presented after a behavior, increases the likelihood of that behavior occurring again.