Is COVID-19 an unforeseen circumstance for home sale gain partial exclusion?

Forum|Forum|3 years ago
October 13, 2022
2 replies
20 views

When we purchased our home, we it was hard to gauge what our future time commitment would be in office nor when that would ever return. We purchased a home about 30 miles from NYC in late 2020 and when things started to "return to normal" at the start of 2022 and offices were allowing and encouraging employees back to work it no longer was feasible to have a 1.5 hour+ commute each way plus factoring in client events, etc. So we sold our home at a slight gain (after adjusting cost basis) after about 18 months of ownership. Would this be considered in the unforeseen circumstances for partial exemption of the gain as it seems to apply to many of the following - the only one that doesn't really apply is the financial consideration.

• The situation causing the sale arose during the time
you owned and used your property as your residence.
• You sold your home not long after the situation arose.
• You couldn’t have reasonably anticipated the situation
when you bought the home.
• You began to experience significant financial difficulty
maintaining the home.
• The home became significantly less suitable as a
main home for you and your family for a specific reason.

Any thoughts on how the IRS would consider this?

Not A Product Question

Bsch4477

Level 15

I certainly would not guess the IRS response to your argument but you certainly have a reasoned position. You could take the partial exclusion with the hope that you would not be audited and that they accept your reasoning if you are.

AmeliesUncle

Level 15

@804110 wrote:
• You couldn’t have reasonably anticipated the situation
when you bought the home.

In my opinion, that is the potential deal-breaker. It seems quite reasonable to have anticipated that pandemic would end (or be reduced) and that you would return to work.