Betty and Bob Spencer have been married for twenty years and have three children. Unfortunately their work circumstances require that Betty be in one city through the week and Bob in another city, although they try to meet up in one location each weekend. For simplicity of living arrangements, the couple own two homes one in Betty's name and one in Bob's name. The couple has both acquired new positions so they plan to sell both homes and relocate their family to a new city. The homes were purchased in 1990 and will be sold this year. Given this information, which one of the following statements is true? The Spencers have the flexibility in the designation of either home as a principal residence, but can designate one home in any single year. Separate ownership allows for the principal residence exemption to be applied to both homes, simultaneously. The Spencers must select only one home for the period 1990 to this year, against which the principal residence exemption will be applied. The principal residence exemption applies only to the primary residence occupied by the three children and their resident parent.