Which of the Following Statements Regarding a Taxpayer's Principal Residence

question 44

Multiple Choice

Which of the following statements regarding a taxpayer's principal residence is true for purposes of determining whether the taxpayer is eligible to exclude gain realized on the sale of the residence?

• A) A taxpayer may have more than one principal residence at any one time.
• B) A taxpayer's principal residence may not be a houseboat.
• C) A taxpayer with more than one residence may annually elect which residence is considered to be the principal residence.
• D) None of these statements is true.

---

Definitions:

Cash Dividends

A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders in the form of cash.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.

Operating Activities

Transactions related to the primary business operations, like selling goods or services and other core business activities, reflected in the company's cash flow.

Free Cash Flow

The amount of cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.