taxpayers who do not meet the two-year ownership and use tests may qualify for a reduced exclusion. A reduced exclusion is available if the primary reason the taxpayer sold a main home was due to any of the following:
- change in place of employment
- health
- unforeseen circumstances
for each of these, a safe harbor rule is available. if the safe harbor is not met, a taxpayer can still satisfy one of the above conditions based on facts and circumstances.
