Capital Gains Partial Exclusion

[patz127]

Hello,

We purchased a house 1 year and 8 months ago. We purchased it in a rural location due to my wife's job. She no longer works at this company but now has a remote job for a company in a different state. Would a partial exclusion still affect us since her new pay stubs are from an office location 50 + miles away?

[ColeenD3]

No. You have to be required to move due to work.

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.

[patz127]

Thanks for the explanation. Just so I understand how do they prove you are not moving for the job if your pay stub is coming from a physical address from a different state?

[Opus 17]

---

@patz127 wrote:

Thanks for the explanation. Just so I understand how do they prove you are not moving for the job if your pay stub is coming from a physical address from a different state?

---

Just because you might get away with it doesn't make it right.  Most people aren't audited, but if you are audited, you would have to prove that she had a change in job location that would have made her commute at least 50 miles longer than before.  I have no idea what questions the auditor will ask, but remember that in an audit, you have the burden of proving any deduction, the IRS does not have to prove you aren't entitled to a deduction.

The risk is up to you. 

[patz127]

This make sense. Thanks for further clarification