Wyatt Sells His Principal Residence in December 2016 and Qualifies

question 114

True/False

Wyatt sells his principal residence in December 2016 and qualifies for the § 121 exclusion.He sells another principal residence in November 2017.Under no circumstance can Wyatt qualify for the § 121 exclusion on the sale of the second residence.

---

Definitions:

Variable Costing

An accounting method that includes only variable production costs (direct labor, direct materials, and variable overhead) in product costs, excluding fixed overhead costs.

Absorption Costing

A ledger keeping approach in accounting that wraps all costs connected to manufacturing—expenses for direct materials, wages for direct labor, and all types of manufacturing overhead, fixed and adjustable—into a product's total cost.

Contribution Format

An income statement format that separates fixed costs from variable costs to highlight the contribution margin.

Variable Costing

An accounting method that includes only variable production costs in product costs and treats fixed production costs as period costs.