Donna occupies the penthouse in a luxury residential building.

This describes a cooperative, making C correct. In a cooperative, residents generally do not receive a deed conveying fee ownership of their individual apartment. Instead, the cooperative entity owns the building, while the resident purchases shares or membership interests and receives a proprietary lease granting the right to occupy a particular unit.

The Massachusetts Board ' s official curriculum specifically explains that cooperative residents own shares in the corporation owning the building. The proprietary lease connects a defined number of shares with the shareholder ' s right to occupy a specified space and use common facilities. Monthly charges are commonly based on the number of shares and can cover maintenance, repairs, improvements, real estate taxes, and interest on the building ' s underlying mortgage.

A condominium is materially different: the unit owner ordinarily holds a deeded interest in the individual unit plus an undivided interest in common areas. The building-level financial structure described in the question—particularly shares plus an underlying cooperative mortgage—is characteristic of a co-op.

Massachusetts tax authority guidance also recognizes the stock-plus-proprietary-lease structure of residential cooperatives.

Study Guide Reference: Property Ownership — Condominiums, Cooperatives and Timeshares.