@Hal_Al you mentioned "If you lived in it less than 2 years but moved (at least 50 miles) for employment reasons*, you may still exclude the gain. The $500K max is reduced (in your case [lived there 1 year] to $250K). Since your gain was only $45K, you get to exclude it all. "
I am not sure if this applies to us. We bought the property in July 2017. We lived there for 1 year and rented in August 2018.
The reason we moved was - when we bought the property I had no job. After we bought the property, I got a job around 20 miles away from the property. I was pregnant and had a difficult pregnancy and was driving everyday on the interstate with heavy Chicago traffic. It would take at least 1.5 hours one-way during peak hours and was difficult for me. Also, once the baby was born I didn't want to leave the baby at a daycare near home and drive 1.5 hrs away from a 3 month old baby because if anything is needed urgently I won't be near to be there. Baby was born in July 2018.
So looking at all these things, we made a hard decision of renting our property and moving out.
I don't know if this reason qualifies for the exclusion reasons.
We have been renting out the property from August 2018 to July 2021 and selling in July 2021.
We have been paying the rental income tax but did not claim any depreciation deduction.
So can you tell me if this partial exclusion rule would apply to us? We spoke to 1 CPA and she just told us about the 2yrs and $500K rule.
