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jmangold35
New Member

Moving out of state for work have house 23 months and 3 days at time of new sale. Do we qualify for I for a capital gains exemption for AZ state taxes

House sold 23 months and 3 days from purchase. Moved from AZ to MI for work. Have not taken a cap gains exemption in last two years.
2 Replies
ColeenD3
Expert Alumni

Moving out of state for work have house 23 months and 3 days at time of new sale. Do we qualify for I for a capital gains exemption for AZ state taxes

Yes, you can use the partial exception. Arizona conforms to the Federal rules. Please see this link for more information. Arizona Sale of Home 

 

You can always call the state directly. The phone number is (602) 255-3381

 

[Edited 1/18/2021 @ 1:06 PM EST]

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Hal_Al
Level 15

Moving out of state for work have house 23 months and 3 days at time of new sale. Do we qualify for I for a capital gains exemption for AZ state taxes

I'm not familiar with AZ tax rules, but a reading of the form instructions implies that if it qualifies for the federal exclusion (deduction), it qualifies for AZ.  And you do qualify for the federal exclusion*, because coming up short of the 2 year rule is due to a job change.

 

The AZ form starts with the federal AGI (which already excludes the home sale gain). There is no where to add back that exclusion, on the AZ form.  I don't think you'll encounter a place in the TurboTax Arizona interview to add that back.

 

Find form instruction at https://azdor.gov/forms/individual/form-140-arizona-resident-personal-income-tax-booklet

 

*When you don't meet the two year rule, the maximum exclusion is reduced. In your case, the maximum exclusion is  703 days /730 = 0.963 x $500,000 (Married filing jointly) = $481,500.

 

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