Thank you for the detailed feedback and references. I agree that the exclusion is based on the smaller of the ownership and use periods, but my understanding from IRS Publication 523 is that health-related moves qualify for a partial exclusion even if the full use requirement isn’t met. In my case, severe health issues linked to environmental conditions in the home made it unsafe to live there, which seems to align with the criteria for a health-related exception.
Regarding the principal residence factors, since this was my only home during the relevant period and was intended as my primary residence (e.g., for taxes and utilities), wouldn’t that satisfy the principal residence requirement despite minimal physical presence?
I appreciate your suggestion to consult a tax professional, and I plan to do so to ensure my filing is accurate. If you have additional guidance or interpretations, I’d be grateful for them. Thanks again!
