Q. Is vandalism by a neighbor qualify as “unforeseen circumstance” under capital gains?
A. Simple answer: Yes. But, more accurately, "probably", as explained at the other replies.
Q. Curious what the "exclusion" percentage might be?
A. It's not actually an exclusion percentage or prorated exclusion. When you fail to meet the 2 year rules, but are claiming an exception for “unforeseen circumstances", you are allowed a reduced maximum exclusion. It's best explained by example. If you only lived there 8 months, the maximum you could exclude would be 8/24 x $250,000 = $83,333. So, as long as your gain was less than $83,333, you would be allowed to exclude the entire gain.
