Final answer:
The periods of ownership and use for a taxpayer to qualify for exclusion of gain on the sale of a principal residence need not be continuous or concurrent, as long as they total two out of the five years prior to the sale. This is understood within the context of U.S. tax principles, specifically the benefit principle and ability-to-pay principle.
Step-by-step explanation:
For determining whether a taxpayer qualifies to exclude gain on the sale of a principal residence, it is correct that the periods of ownership and use need not be continuous nor do they need to cover the same two-year period. This is based on the Internal Revenue Code, specifically relating to capital gains on the sale of personal residences. To qualify for the exclusion, a taxpayer typically must have owned and used the property as their principal residence for at least two out of the five years prior to the sale.
The benefit principle of taxation and the ability-to-pay principle are the foundational concepts in the United States tax system. While these principles do not directly govern the specifics on the exclusion of gains from the sale of a principal residence, they are important in understanding the broader context of taxation laws.