House sale prior to 2 years

Forum|Forum|4 years ago
January 26, 2022
1 reply
8 views

My spouse and I sold our home in July 2021 after living there for 3 years, so will not have to pay capital gains tax as we made less than $100,000- profit. We purchased a new home in July 2021 and now may be moving out of state to take another job. If we take the new job offer, we would be moving around July 2022 and hopefully selling our house around that time. Do not know if we will have capital gains on the home as we have lived in it for such a short time, although we have been doing quite a bit of remodeling. If we do have capital gains, my understanding is that even though we just took the capital gains exclusion in 2021, we can still take a partial exclusion in 2022 because we are selling it due to a job related move. I am basing it on publication 523 that I found on the IRS website. Does this sound correct?

JamesG1

Level 15

It does sound correct. See below.

IRS Publication 523 page 6

Does your home qualify for a partial exclusion of gain?

You meet the requirements for a partial exclusion if any of the following events occurred during your time of ownership and residence in the home.

You took or were transferred to a new job in a work location at least 50 miles farther from the home than your old work location. For example, your old work location was 15 miles from the home and your new work location is 65 miles from the home.
You had no previous work location and you began a new job at least 50 miles from the home.
Either of the above is true of your spouse, a co-owner of the home, or anyone else for whom the home was his or her residence.

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