Which of the Following Statements Is False with Regard to the Ownership

question 49

Multiple Choice

Which of the following statements is false with regard to the ownership and use tests under Sec.121?

• A)The taxpayer must be occupying the residence at the time of the sale in order for Sec.121 to apply.
• B)If a principal residence is sold before satisfying the ownership and use tests,part of the gain may be excluded if the sale is due to a change in employment,health,or unforeseen circumstances.
• C)For purposes of the two-year ownership rule,a taxpayer's period of ownership includes the period during which the taxpayer's deceased spouse owned the residence.
• D)When a taxpayer receives a residence from a spouse or an ex-spouse incident to a divorce,the taxpayer's period of owning the property includes the time the residence was owned by the spouse or ex-spouse.

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Definitions:

Sole Proprietorship

A business structure where a single individual owns, manages, and is personally responsible for all aspects of the business.

Corporation

A legal entity that is separate from its owners, offering limited liability protection to its shareholders, and having the ability to raise funds by selling stock.

Balance Sheet Accounts

Accounts found on the balance sheet that include assets, liabilities, and equity, detailing the financial position of a company at a specific point in time.

Permanent Accounts

Accounts that are not closed at the end of the accounting period, such as assets, liabilities, and equity accounts.