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rkamisat
New Member

Do I qualify for capital gains partial exemption on selling my condo?

I am selling my condo that I purchased in February 2018. I looked through the reasons for exemptions list for the capital gains tax on the IRS website and I think I may qualify for one. My girlfriend who lives here as well was laid off and unemployed from November of 2018-January 15, 2019. She collected unemployment until beginning of January. Does that qualify me for the partial exemption and what is the process for filing taxes next year to include that?

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4 Replies
Coleen3
Intuit Alumni

Do I qualify for capital gains partial exemption on selling my condo?

Yes, you can possibly get the exclusion. You must substantiate the event as per the information at the bottom of the answer.

Unforeseeable events.

You meet the standard requirements if any of the following happened during the time you owned and lived in the home you sold.

  • Your home was destroyed or condemned.
  • Your home suffered a casualty loss because of a natural or man-made disaster or an act of terrorism. (It doesn’t matter whether the loss is deductible on your tax return.)
  • You, your spouse, a co-owner of the home, or anyone else for whom the home was his or her residence:

1.Died;

2.Became divorced or legally separated;

3.Gave birth to two or more children from the same pregnancy;

4.Became eligible for unemployment compensation;

5.Became unable, because of a change in employment status, to pay basic living expenses for the household (including expenses for food, clothing, housing, medication, transportation, taxes, court-ordered payments, and expenses reasonably necessary for making an income).

Under Sale of Home, you would answer the questions that pertain to the exclusion. State the number of days lived there, and you will have the appropriate questions.

Showing facts and circumstances.

If your circumstances don’t match any of the standard requirements described above but the primary reason for sale, based on facts and circumstances, is work-related, health-related, or unforeseeable. Important factors are:

  • The situation causing the sale arose during the time you owned and used your property as your residence.
  • You sold your home not long after the situation arose.
  • You couldn’t have reasonably anticipated the situation when you bought the home.
  • You began to experience significant financial difficulty .

From <https://www.irs.gov/pub/irs-pdf/p523.pdf

Coleen3
Intuit Alumni

Do I qualify for capital gains partial exemption on selling my condo?

HOw else can I help you?
rkamisat
New Member

Do I qualify for capital gains partial exemption on selling my condo?

So when I file, what is the procedure to include this exception and how do I know if the IRS accepts the request?
Coleen3
Intuit Alumni

Do I qualify for capital gains partial exemption on selling my condo?

They always accept initially. You might get a letter after the fact asking for further info. IF that happens, you would have to make your case.
As I said above: Under Sale of Home, you would answer the questions that pertain to the exclusion. State the number of days lived there, and you will have the appropriate questions.
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