topic If you move prior to owning a home for 2 years but you are moving with your company out of state, do you still have to pay tax on capital gains? in Deductions & credits

If you move prior to owning a home for 2 years but you are moving with your company out of state, do you still have to pay tax on capital gains?

chibelladini — Tue, 24 Feb 2026 06:43:35 GMT

Re: If you move prior to owning a home for 2 years but you are moving with your company out of state, do you still have to pay tax on capital gains?

DoninGA — Mon, 19 Jun 2023 14:41:38 GMT

For a work related move you would be eligible for a partial exclusion on any gains from the sale of your home if you have not lived and owned the home for two years.

Go to IRS Publication 523 page 6 the partial exclusion requirements - https://www.irs.gov/pub/irs-pdf/p523.pdf#page=6

For example if you lived in and owed the home for one year and your filing status is Single the partial exclusion would be $250,000 * 12/24 = $125,000

Re: If you move prior to owning a home for 2 years but you are moving with your company out of state, do you still have to pay tax on capital gains?

NCperson — Mon, 19 Jun 2023 21:56:45 GMT

@chibelladini so you may still have to pay capital gains, but as @DoninGA notes, there is still an exclusion. it is just prorated given the circumstances.

Many beleive (incorrectly) that it is the capital gains that gets prorated; it is the exclusion that gets prorated.

Re: If you move prior to owning a home for 2 years but you are moving with your company out of state, do you still have to pay tax on capital gains?

Hal_Al — Mon, 19 Jun 2023 22:19:45 GMT

Q. If you move prior to owning a home for 2 years but you are moving with your company out of state, do you still have to pay tax on capital gains?

A. Simple answer: No. There is an exception for a work related move.

But the maximum amount that is not taxable is reduced for the reduced time in the home. For somebody meeting the 2 year rule, the maximum capital gain that can be excluded is $250,000 ($500,000 Married filing jointly). Using an example; a person who only owned and lived in the home 16 months could only exclude up to $166,667 (16/24 x $250K).