Question 38 of 75. Corrine sold her home a few years ago in a seller-financed transaction. She qualified for the principal residence exclusion at the time of the sale, and she was able to exclude the entire amount of her gain. Unfortunately, the transaction did not work out, and she repossessed the property after the buyer defaulted. If Corrine later resells the home, which of the following statements regarding the principal residence gain exclusion is TRUE? The amount previously excluded must be recaptured and is subject to capital gain tax treatment in the year of resale The exclusion will still apply to the original sale, but under no circumstances can it be used to shelter gain on the repossession or resale. - B VAS ESCORRECT ON IS Tesi The exclusion may apply to all three transactions (the original sale, repossession, and resale), but only if Corrine owned and used the property as her principal residence for two of the last five years ending on the date of rosale. O Corrine may be eligible to exclude gain on the repossession and the resale as well as the original sale, but only if she resells tho home within one year after repossessing it