We lived in my house for 13months and sold the house because we felt It's not safe to live anymore.
We had wild fires and had multiple evacuation order and had to leave home few days each time.
Our house did not have direct dame. Fire stopped about 1mile from our house.
Even after the evacuation order is lifted. Air was hazardous for weeks.
We decide to sell the house and sold before 2 year of living.
Do I qualify for Partial Exclusion of Gain?
If we qualify, how do we report the reason on tax return.
Should I contact IRS?
Thank you
Possibly. The category could be "Other unforseen circumstances" so you'll need to document your reasoning in case it ever comes up.
You'll need to ask yourself and document items like: In your situation did the area have a history of wildfires? If so, was that brought to your attention in the sale? Were there some added unforseen expenses that made your continued ownership/residence challenging? You mentioned "Not safe to live there anymore" is this because the wildfire threat is now on going because something in the area changed? or the past wildfires have changed the property making it more dangerous? For example weakened trees for which the cost to remove or mitigate is too much. Whatever you can think of that shows the property is unaffordable for you based on unforseen circumstances.
Again document and keep for your records with your tax returns.
In the "Wages & Income" section scroll down to "Less Common Income" and use the "Home Sale" topic. Follow the prompts and enter your residence and ownership time as well as cost and sale information. Eventually you will arrive at the area to select a resason for the partial exclusion claim.
Possibly. The category could be "Other unforseen circumstances" so you'll need to document your reasoning in case it ever comes up.
You'll need to ask yourself and document items like: In your situation did the area have a history of wildfires? If so, was that brought to your attention in the sale? Were there some added unforseen expenses that made your continued ownership/residence challenging? You mentioned "Not safe to live there anymore" is this because the wildfire threat is now on going because something in the area changed? or the past wildfires have changed the property making it more dangerous? For example weakened trees for which the cost to remove or mitigate is too much. Whatever you can think of that shows the property is unaffordable for you based on unforseen circumstances.
Again document and keep for your records with your tax returns.
In the "Wages & Income" section scroll down to "Less Common Income" and use the "Home Sale" topic. Follow the prompts and enter your residence and ownership time as well as cost and sale information. Eventually you will arrive at the area to select a resason for the partial exclusion claim.
Thank you DMarkM1
I will do more research for the area to make my document.
Is it possible to get pre-approve from IRS before my TAX return?
You might contact a Tax Advocate Office for a reading on the subject. Here is a link to use to find the nearest office to your location.