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chula0727
New Member

I sold my home in WA state and I only lived in it for 23 months because of military PCS orders to move, do I have to pay taxes on the profit made?

I am understanding that if you lived in it 2 out of 5 years you do not have to pay tax on the profit, but I am 1 month short of the 2 years because the military moved my husband and I to MD state.
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Accepted Solutions
DianeW
Expert Alumni

I sold my home in WA state and I only lived in it for 23 months because of military PCS orders to move, do I have to pay taxes on the profit made?

A work related move does qualify to reduce the amount that may be taxable.  In your situation the exclusion will be significant.

IRS Publication 3: What happens if I don't meet the ownership and use tests? If you do not meet the ownership and use tests due to a move to a new permanent duty station, you can exclude gain, but the maximum amount of gain you can exclude will be reduced. See Pub. 523 for more details.

IRS Publication 523Partial Exclusion May Be Available If you don't meet the eligibility test, you may still qualify for a partial exclusion of gain if you moved because of work, health, or an unforeseeable event. You can qualify either by meeting a set of standard requirements (the “safe harbor” provisions) or by showing enough facts and circumstances to validate your claim

Work-related move. You meet the standard requirements if any of the following happened during the time you owned and lived in the home you sold: You took or were transferred to a new job in a work location at least 50 miles farther from home than your old work location. You had no previous work location and you began a new job at least 50 miles from home. Either of the above is true of your spouse, a co-owner of the home, or anyone else for whom the home was his or her residence.

TurboTax will walk you through this exclusion and some of your gain may be taxed but not most of it.

1. Sign into your TurboTax account (online or desktop)

2. Use the search box in the upper right

3. Search for home sale

4. Jump to home sale (image attached)

5. Continue to follow the interview to enter your sale and answer the work related move questions. (see the images attached)

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1 Reply
DianeW
Expert Alumni

I sold my home in WA state and I only lived in it for 23 months because of military PCS orders to move, do I have to pay taxes on the profit made?

A work related move does qualify to reduce the amount that may be taxable.  In your situation the exclusion will be significant.

IRS Publication 3: What happens if I don't meet the ownership and use tests? If you do not meet the ownership and use tests due to a move to a new permanent duty station, you can exclude gain, but the maximum amount of gain you can exclude will be reduced. See Pub. 523 for more details.

IRS Publication 523Partial Exclusion May Be Available If you don't meet the eligibility test, you may still qualify for a partial exclusion of gain if you moved because of work, health, or an unforeseeable event. You can qualify either by meeting a set of standard requirements (the “safe harbor” provisions) or by showing enough facts and circumstances to validate your claim

Work-related move. You meet the standard requirements if any of the following happened during the time you owned and lived in the home you sold: You took or were transferred to a new job in a work location at least 50 miles farther from home than your old work location. You had no previous work location and you began a new job at least 50 miles from home. Either of the above is true of your spouse, a co-owner of the home, or anyone else for whom the home was his or her residence.

TurboTax will walk you through this exclusion and some of your gain may be taxed but not most of it.

1. Sign into your TurboTax account (online or desktop)

2. Use the search box in the upper right

3. Search for home sale

4. Jump to home sale (image attached)

5. Continue to follow the interview to enter your sale and answer the work related move questions. (see the images attached)

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