Sarah Is a Homeowner and a Single Taxpayer

question 6

Multiple Choice

Sarah is a homeowner and a single taxpayer. She has owned and occupied the house as a principal residence for the last 8 years. In the current taxable year, she receives a promotion. She sells her home and moves to another area. The capital gain on the sale of the principal residence will:

• A) be taxable as ordinary income.
• B) be taxable at a rate of 25%.
• C) be taxable at the appropriate short-term capital gains rate.
• D) be taxable excluding the first $250,000 of the gain.
• E) not be taxable because the relocation is a job-related move.

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Definitions:

Periorbital Edema

Swelling around the eyes due to fluid accumulation, often resulting from allergies, infections, or injuries.

Exophthalmos

A condition characterized by an abnormal protrusion of the eyeball(s) from the orbit, commonly associated with thyroid disease, specifically Graves' disease.

Hyperthyroidism

A condition characterized by the overproduction of thyroid hormones by the thyroid gland, leading to an acceleration of the body's metabolism.

Hordeolum

A common eyelid infection, also known as a stye, characterized by a painful, red lump near the edge of the eyelid.