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Income taxSubject 17 of 19

Principal residence

A person's main home for tax purposes, determined from use and the applicable facts and rules.

Direct answer

What does Principal residence mean?

A person's main home for tax purposes, determined from use and the applicable facts and rules.

Exam cue: The federal home-sale exclusion has ownership and use tests plus limits and exceptions. It is not automatic for every home sale.

What does it look like in a question?

New York example

A taxpayer reviews time owned and used as a main home before claiming an exclusion.

Common exam trap

What should you not confuse it with?

Principal residence is not necessarily every property a person owns or visits.

Related income tax terms

Adjusted basisOriginal basis increased or decreased by tax-law adjustments such as qualifying improvements and allowed depreciation.Amount realizedThe total value received on a disposition, adjusted for selling expenses and other items as tax law provides.BasisA tax measurement used to determine gain, loss, depreciation and other tax consequences for property.Capital gainGain from the sale or exchange of a capital asset, calculated under tax law and subject to classification and exclusions.Depreciation recaptureTax treatment that can recharacterize or specially tax part of gain tied to prior depreciation deductions.Like-kind exchangeA tax-deferred exchange under Internal Revenue Code section 1031 for qualifying real property held for investment or productive use in a trade or business.
Sources used2 references with section locators

The curriculum citation confirms exam scope. Definition and rule citations support the explanation itself. Links and locators were checked on August 26, 2026.

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