It is a basic way to ignore answering a question. It can also be used to come-back from a burn, however most people don't think it to be a very good come-back. The main use of it is between 7-11 year old children.
"Hey, want some pizza? I just bought it-"
"Ur mom"
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(In an argument)
"At least I didn't eat the old cheese-it on the ground!"
"Ur mom"