Problem:
Which of the following statements is false with regard to the ownership and use tests under Sec. 121?
- For purpose of the two-year ownership rule, taxpayer's period of ownership includes the period during which the taxpayer's deceased spouse owned the residence
- The taxpayer must be occypying the residence at the time of the sale in order for sec 121 to apply
- If a principal residence is sold before sastifying the ownership and use tests, part of the gain maybe excluded if the sale is due to a change in employment, health, or unforseen circumstances
- When a taxpayer receives a residence from a spouse or anex-spouse incident to a dirvorce, the taxpayer's period of owning the property includes the time the residence was owned by the spouse or ex-spouse
Note: Provide support for rationale.