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:

Marginal Cost

The increase or decrease in the total cost that arises when the quantity produced is incremented by one unit.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the total quantity produced.

Total Revenue

The overall income obtained by an enterprise from its sales or services within a designated period.

Marginal Revenue

The extra revenue gained by selling an additional unit of a product or service.