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chapter 14 acct 311
Terms in this set (91)
In general terms, the tax laws favor taxpayers who own a principal residence relative to those who rent a principal residence.
Renting a residence may have nontax advantages over owning a home.
A personal residence is not a capital asset.
A taxpayer may be required to include in gross income gain the taxpayer realizes when she sells her principal residence.
For tax purposes a dwelling unit is a residence if the taxpayer's number of personal use days of the unit is more than ten days.
When determining the number of days a taxpayer has rented a home during the year, any day when the home is available for rent but not actually rented out counts as a day of rental use.
When determining the number of days a taxpayer has rented a home during the year, any day when the home is available for rent but not actually rented out counts as a day of personal use.
Taxpayers meeting certain requirements may be allowed to exclude at least a portion of gain realized on the sale of a principal residence.
The ownership test for excluding gain on the sale of a principal residence requires the taxpayer to have owned the property for three or more years during the five year period ending on the date of sale
A taxpayer who otherwise meets the ownership and use tests may not be allowed to exclude all of her realized gain if the taxpayer has nonqualified use of the home before selling.
To be allowed to exclude gain on the sale of a principal residence, the taxpayer selling the home must be using the home as a principal residence at the time of the sale
For determining whether a taxpayer qualifies to exclude gain on the sale of a principal residence, the periods of ownership and use need not be continuous nor do they need to cover the same two-year period.
A married couple filing a joint tax return is eligible to exclude up to $500,000 of gain realized on the sale of a personal residence if both spouses meet the ownership test and at least one spouse meets the use test.
A taxpayer can qualify for the home sale exclusion even if she has moved out of the home and is renting the home to another at the time of the sale.
A taxpayer who sells a principal residence that has been used (or is being used) as a rental property since 2005 will not be allowed to exclude the portion of the gain attributable to depreciation even if the taxpayer meets the ownership and use tests and the gain realized on the sale is lower than the maximum exclusion amount.
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