Ownership
(3) Ownership(i) Trusts. If a residence is owned by a trust, for the period that a taxpayer is treated under sections 671 through 679 (relating to the treatment of grantors and others as substantial owners) as the owner of the trust or the portion of the trust that includes the residence, the taxpayer will be treated as owning the residence for purposes of satisfying the 2-year ownership requirement of section 121, and the sale or exchange by the trust will be treated as if made by the taxpayer. (ii) Certain single owner entities. If a residence is owned by an eligible entity (within the meaning of 301.7701-3(a) of this chapter) that has a single owner and is disregarded for federal tax purposes as an entity separate from its owner under 301.7701-3 of this chapter, the owner will be treated as owning the residence for purposes of satisfying the 2-year ownership requirement of section 121, and the sale or exchange by the entity will be treated as if made by the owner. (4) Examples. The provisions of this paragraph (c) are illustrated by the following examples. The examples assume that 1.121-3 (relating to the reduced maximum exclusion) does not apply to the sale of the property. The examples are as follows: