Do you happen to know anything about Safe Harbor that potentially can achieve partial exclusion?
If you were active duty military or a government employee "FORCED" to move because of PCS or relocation orders, then the 2 of last 5 rule can be extended to a maximum of "2 of last 10". Can also get a partial exclusion under those circumstances if you were forced to move before you could complete the 2 years as your residence. But that doesn't work if you were moved under orders in say, 2012, retired or left the military or government job in 2017 and did not move back into the house afterwards.
As an example, lets say you are military and have been for the last 10 years. In 2015 you were relocated by the military under PCS orders to Florida, where you purchased a house. Twenty months later the military issues you PCS orders to Japan for a four year tour.
After the Japan tour you retire/separate from the military and move to Texas. If you don't close on the sale within 1 year after your separation date, you flat out do not qualify for the exclusion. But lets say you do sell the property within one year after separating from the military, and you have a $200,000 gain.
For each month you lived in the house you get to exclude approximately 10.1% of your gain from taxes. Understand that's *NOT* a percentage of $250,000 you get to exclude. YOu can exclude about 10.1% of your Actual gain* from taxes for each month you lived in the house as your primary residence.
So having lived in the property 20 months of the last 6 years you owned it. (you left the military, so you only get to add one year past your separation date to the exclusion rule)
So if you sell the house for a $200,000 gain, you only get to exclude about 83% of that gain from taxation, or roughly $166,000. So you will pay taxes on $44,000 of that gain.
