What documents will I need to prove that I moved over 50 miles for employment to avoid capital gains tax?

[Opus 17]

---

@jwpruitt382 wrote:

This might be a strange question but: 

My husband got a promotion within his company.  His job base is 50 miles further from the house then his old job base, but: 

1) He works from home

2) We moved to a house that is further away 

The reason we moved, was because in the house we sold we shared an office.  When we bought the house, he didn't work from home, so us sharing an office for our free time wasn't an issue.  With him working from home permanently with the new job, and me working at home occasionally, we believed it would be better for him to have his own dedicated office space so we wouldn't interfere with each others work.  We moved about 10 minutes further away from his new job base than our old house, into a house with an additional room that would serve as his office, but a commute wasn't the work related reason why we moved.  Will we still qualify for a partial exclusion? 

---

The partial exclusion has several "safe harbors", conditions that, if you meet them, the IRS won't question you further.  You don't meet any of the safe harbors, mainly because the primary work location is the house, and even if it wasn't, you moved in the wrong direction.

You may also qualify for a partial exclusion based on "other facts and circumstances."  In Turbotax, you would just claim that you qualify, you don't send proof to the IRS.  But keep proof for at least 3 years in case of audit.

Other Facts and Circumstances

Even if your situation doesn’t match any of the standard requirements described above, you still may qualify for an exception. You may qualify if you can demonstrate 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 maintaining the home.

• The home became significantly less suitable as a main home for you and your family for a specific reason.

[AmyC]

You did not mention how long you have owned the home. Every two years, you can sell your main home and pocket capital gains of $250,000 each provided you qualify for the exclusion. Please see Pub 523 to see if you qualify.

@jwpruitt382    @Opus 17  is correct.