Which of the following statements regarding the income tax treatment of a principal residence is NOT correct? O If an individual owns two residences, and both are sold in the same year, the principal residence formula will eliminate the capital gain on only one of the residences. If an individual owns two residences, the decision to designate a particular property as the principal residence must be made when the residence is sold. If an individual owns only one residence, the principal residence formula will eliminate any capital gain on the sale. OA capital loss cannot be realized on the sale of a principal residence.