Partial Exclusion of Capital Gains on sale of residence

[SpartanHawk]

Question: Does home sale qualify for a Partial Exclusion of Gain for a work related move?

Details: Sam is active duty military and purchased a home in southern Florida on 21 NOV 2017 and lived there until it was rented out on 01 NOV 2019.  Sam left the area due to PCS orders to Tennessee.  The home remained a rental property until it was sold on SEP 2023.  Does Sam qualify for the partial exclusion of gain due to the PCS?

- Total Residence Time: 710 Days

- Total Ownership Time: 5 years, 9 months, 11 days excluding the end date

- Distance between work location and home >>>>>>50 Miles than old location

Thanks a bunch!!!

[Critter-3]

First the depreciation taken or allowed must be recaptured even if you can exclude the cap gain on the sale.  If you have not been taking the required depreciation then RUN to a professional tax pro when you file your next return so that the form 3115 can be properly filed with the return.  

Read up starting on page 17 of the PUB 3 ( third book you always should  have on your nite stand) to see if you qualify for the extended exclusion period of up to 10 years. https://www.irs.gov/pub/irs-pdf/p3.pdf

In the TT program you will NOT sell the rental in the rental asset section ...  you will simply indicate you converted the property back to personal use (to stop the depreciation)  and then  report the sale later in the program ...  

To report the sale of a primary personal residence -

• Click on Federal Taxes (Personal using Home and Business)
• Click on Wages and Income (Personal Income using Home and Business)
• Click on I'll choose what I work on (if shown)
• Scroll down to Less Common Income
• On Sale of Home (gain or loss), click the start or update button

[NCperson]

@SpartanHawk what should occur is that the exclusion is 710/730 *$250,000 (assume Single) or $242,820.....the capital gains itself does not get pro-rated. 

[Carl]

Does Sam qualify for the partial exclusion of gain due to the PCS?

No. Based on the dates provided and because he is military, they qualify for the FULL exclusion since the move was because of PCS orders.

See IRS Publication 523 at https://www.irs.gov/pub/irs-pdf/p523.pdf on page 4, section titled, "Service, Intelligence, and Peace Corp Personnel".

[rjs]

Is this a homework question or an exam question? It sounds more like an exercise from a tax course than a real situation. What is your relationship to Sam?