Question

1.) To qualify for the § 121 exclusion, the property must have been used by the taxpayer for the 5 years preceding the date of sale and owned by the taxpayer as the principal residence for the last 2 of those years.

a.) ture

b.) false

2.) Pat generated self-employment income in 2018 of $76,000. The self-employment tax is:

	a.	$0
	b.	$11,628
	c.	$10,738.46
	d.	$5,369.23

3.) A long-term capital gain is the gain from the sale of a capital asset held six months or longer.

a.)True

b.)False

Answer 1

1.) Ans. b False ,

To qualify for the § 121 exclusion, a taxpayer must own and occupy the property as a principal residence for two of the five years immediately before the sale. However, the ownership and occupancy need not be concurrent.

2.)Ans b $11628

Self employment income is taxed @ 15.3% on the income earned more than $400.

Therefore self employment tax to be paid on $76000 is = 76000*15.3% = $11628

3.)Ans b False

A long-term capital gain is the gain from the sale of a capital asset held for 12 months or longer.

DC