Eligibility check for the exemption from the capital gain taxes under unforeseen circumstances

[AravM]

As a first-time buyer, I bought a 45-year-old primary home in Illinois in February 2017. Then, I had to leave the United States due to a change in my visa status and a job loss. I rented my primary house in June 2018 to manage the expenses, relocated to Canada and lived till 2021. I tried to come back to Illinois. But I only got the job in Arkansas. So, I moved to Arkansas. I let my Illinois home continue as a Rental home. Since I could not find a job in Illinois, I got a permanent job in Arkansas. I bought another house in AR as a primary in September 2022 and received my Green card in December 2021. Since my tenant, who has been renting since 2020, moved out in 2024, I listed my Illinois home for sale, which has not yet been sold. I am expecting to get sold in this year. 

Now the question is, am I eligible to be exempt from the capital gain taxes under unforeseen circumstances for the sale of the IL home since it was intended for primary home use, and I cannot live there due to my job loss and could not able to return to the house? 

[AmeliesUncle]

---

@AravM wrote:

February 2017. Then, I had to leave the United States due to a change in my visa status and a job loss. I rented my primary house in June 2018

---

No, for two reasons.

One, the sale of the residence is nowhere near the time when you had to move out for unforeseen circumstances.  If you had immediately put it up for sale, then it would qualify.

Two, even if you did meet the criteria for unforseen circumstances, the prorated maximum exclusion is based on the number of days it was your Principal Residence in the last five years.  It was never your Principal Residence within the last five years, so the prorated exclusion would be $0.