@Critter-3 wrote:
If you had already used the exclusion within the last 2 years you cannot use the exclusion again not even a partial one.
Purchase price + cost to buy + any improvements made while you owned it + cost to sell = basis
Sales price - basis = cap gain or loss.
Incorrect.
If the taxpayer sells due to one of the safe harbor reasons on page 6 of publication 523, they can claim a partial exclusion even if they use the exclusion less than 2 years prior. Each partial exclusion is based on the shortest of three time periods:
- how long the taxpayers owned the home
- how long the taxpayers lived in the home
- how long since the exclusion was last used.
If home #1 was sold in early 2021, after owning for 6 months, and the reason for the sale was one of the reasons that allows a partial exclusion (like a change in work location of more than 50 miles), the taxpayer can claim a partial exclusion on the gain.
If home #2, sold on December 1, was also sold due to a job change or other allowable reason, then a partial exclusion may still be claimed.
If home #2 is not eligible for a partial exclusion, the items that are allowable adjustments to cost basis are described in publication 523 beginning on page 8.
https://www.irs.gov/pub/irs-pdf/p523.pdf
