Which statement is NOT correct about repossession of a former principal residence? If a taxpayer is eligible for the special rule, the two sale prices are combined and reduced by the face value of the original buyer's obligation, expenses of sale from both transactions, and costs of repossession. To be eligible for the general rule, a taxpayer must resell the repossessed property within one year of the date of repossession. A taxpayer who sold their property at a loss is not eligible for the special rule. If a taxpayer uses the general rule, the gain or loss on the repossession is the FMV of the property on the date of repossession, reduced by the seller's basis in the obligation and any costs of repossession.