Hal_Al
Level 15

Deductions & credits

Q.   Am I in the clear even if I have a job again before the close date?

A.  Probably.  Nobody here can give you an answer with absolute certainty.  The Unforeseen circumstances exception depends on all the details of the circumstances.   

 

You do not have to submit proof, when you file your tax return.  Just claim the exclusion.  Be prepared to explain with details if the IRS questions it.  Just being unemployed, for a period, due to covid,  is probably enough.  

 

References: https://gsacpas.com/six-key-tax-breaks-that-homeowners-may-be-able-to-claim/

https://www.nolo.com/legal-encyclopedia/the-partial-home-sale-tax-exclusion-irs-approved-unforeseen-...

https://alloysilverstein.com/understanding-the-home-gain-exclusion/

 

Since you only live in the home 10 months, the maximum exclusion is 10/24 x $500K = $208,333.