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Chapter 14

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.
True False
true
Renting a residence may have nontax advantages over owning a home.
True False
true
. A personal residence is not a capital asset.
True False
false
A taxpayer may be required to pay tax on a gain the taxpayer realizes when she sells her principal
residence.
True False
true
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.
True False
false
6. 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.
True False
false
7. 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.
True False
false
8. Taxpayers meeting certain requirements may be allowed to exclude at least a portion of gain realized on
the sale of a principal residence.
True False
true
9. 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.
True False
false
10. 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.
True False
true
11. 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.
True False
false
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.
True False
true
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.
True False
false
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.
True False
true
A taxpayer who sells a principal residence that has been used (or is being used) as a rental property
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.
True False
true
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