The dates don't seem to match. Am I missing something?

Vote for The dates don't seem to match.  Am I missing something?
0
281 Views
Jerome Stoll

Please ask your question here:
 

Original Fast Forward Academy test bank question:
In 2001, Helen Jones lived in a rented apartment. The apartment building was converted to condominiums, and she bought her same apartment on December 3, 2008. In 2009, Helen became ill and on April 14 of that year she moved to her daughter's home. On July 12, 2011, while still living in her daughter's home, she sold her condominium for gain. Can she exclude her gain from her income?

A. No, because she did not own the property for the entire time she lived there.
B. No, because she did not live in the property for the entire time she owned it.
C. Yes, because she moved out only because she was ill.
D. Yes, because she meets both the ownership and use tests.

Explanation:
A taxpayer can meet the ownership and use tests during different two-year periods. However, the taxpayer must meet both tests during the five-year period ending on the date of the sale. So, Helen can exclude gain on the sale of her condominium because she met the ownership and use tests during the five-year period from July 13, 2005, to July 12, 2011, the date she sold the condominium: She owned her condominium from December 3, 2008, to July 12, 2011, which is more than 2 years, and she lived in the property from at least July 13, 2005 until April 14, 2009, which is more than two years. The time Helen lived in her daughter's home during the five-year period can be counted toward her period of ownership, and the time she lived in her rented apartment during the five-year period can be counted toward her period of use.

FFA RTRP Book Reference: CH 4 Items Excluded from Gross Income
Subsection: Property real and personal
Subject: Property sales (e.g., real and personal such as homes, stocks, and businesses, internet sales)
Correct Answer: D


Expert Level Question
Comments
USE VS OWNERSHIP from 2001 to 2009 = 8 years of USE from 2008 to 2011 = 3 years of OWNERSHIP I don't see a problem with the dates.
Posted by EDWIN on 03/10/2012 @ 1:53 PM
Please login or register to comment on a question.

1 Answer(s)

Vote for this anser to The dates don't seem to match.  Am I missing something?
0
Paul Ketcham

Answer is D correct.


Comments

Report the question for review or moderation

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

The Best Strategy

CPA Exam Guide + Test Bank + Unlimited Exams
CPA AUD, FAR, REG, & BEC Study Guides, Free Test Bank, & Unlimited Practice Exams

Want to pass the CPA exam the first time? Try a course like no other...

The Best EA CPE

Try Our FREE Enrolled Agent CPE
Quality Enrolled Agent Continuing Professional Education (EA CPE)

Learn more about FFA's Quality Enrolled Agent Continuing Professional Education.

Enrolled Agent Affliated Schools