Evelyn,a Calendar Year Taxpayer,lists Her Principal Residence with a Realtor

question 42

Multiple Choice

Evelyn,a calendar year taxpayer,lists her principal residence with a realtor on February 7,2016,enters into a contract to sell on July 12,2016,and sells (i.e. ,the closing date) the residence on August 1,2016.The realized gain on the sale is $225,000.Which date is the appropriate ending date in determining if the residence has been owned and used by the Evelyn as the principal residence for at least two years during the prior five-year period?

• A)February 7,2016.
• B)July 12,2016.
• C)August 1,2016.
• D)December 31,2016.
• E)None of the above.

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Definitions:

Compounded Quarterly

The calculation of interest on the principal amount and any accumulated interest every three months.

Quarterly Withdrawals

The act of taking money out of an account or investment four times a year.

Deposit

An amount of money placed in an account, typically to keep it safe or to earn interest.

Annual Contributions

The amount of money contributed to a particular account or investment over the course of a year.