Sarah Is a Homeowner and a Single Taxpayer

Multiple Choice

Sarah is a homeowner and a single taxpayer. She has owned and occupied the house as a principal residence for the last 8 years. In the current taxable year, she receives a promotion. She sells her home and moves to another area. The capital gain on the sale of the principal residence will:

A) be taxable as ordinary income.
B) be taxable at a rate of 25%.
C) be taxable at the appropriate short-term capital gains rate.
D) be taxable excluding the first $250,000 of the gain.
E) not be taxable because the relocation is a job-related move.