TAX-EXAM 2 ACTUAL 2025/2026 QUESTIONS AND 100% CORRECT ANSWERS

TAX-EXAM 2 ACTUAL 2025/2026 QUESTIONS AND 100% CORRECT ANSWERS Daniel, a single taxpayer, was given a house by his parents several years ago. He has used the home as his principal residence since it was given to him. Daniel's basis in the home was only $65,000. Due to the expansion of the city, he was able to sell the house for $320,000. How will this transaction be treated for tax purposes? - Answer -The first $250,000 of the gain can be excluded and the remaining $5,000 gain will be treated as a long-term capital gain Which of the following choices can be considered a dwelling unit? (Check all that apply.) Condominium Minivan Houseboat Motel room Recreational vehicle (camper) Mobile home - Answer -condo houseboatcamper mobile home Which of the following rules for determining the basis of a personal residence is measured correctly - Answer -gift- the donors basis Which of the following statements is INCORRECT concerning the ownership and use tests used to qualify for the exclusion of a gain on the sale of a personal residence? - Answer -The exclusion of the gain on the sale of a personal residence can on