If I sell my home because I got a new job and needed to move closer will I have to pay capital gains? I have lived in my primary address for 18 months

[Anonymous_]

I also disagree for the same reason.

Clearly, there was no change in the place of employment with respect to the first job.

Further, the second job would not qualify since there it cannot be (logically) claimed that there was no former place of employment since the taxpayer was already employed (at the first job, which never changed).

There is probably only a slight chance that @Vmmatch would ever be audited on this issue, but the fact that the first job never changed is somewhat of a red flag (and the "second job argument" is likely to be a loser).

[Opus 17]

[Edited]

[Vmmatch]

Hey!

wouldn’t the below still qualify me? Below it says if there was “no current place of employment”

my first job is remote so it doesn’t qualify me

But my 2nd job in the new state is 8 states away from my old residence 

The qualified individual's new place of employment is at least 50 miles farther from the residence sold or exchanged than was the former place of employment, or, if there was no former place of employment, the distance between the qualified individual's new place of employment and the residence sold or exchanged is at least 50 miles.

also it states the below on the pub 523 under the qualifying for partial exemption page:  “You had no previous work location and you began a new job at least 50 miles from the home.”

I’d love to know your thoughts thanks!

[Opus 17]

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@AmeliesUncle wrote:

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@Opus 17 wrote:

If job 2 is more than 50 miles from your old home, then job 2 would qualify you to claim the partial exclusion when you sold the old home.   There is no specific time frame required in the law (for example, the law does not require you to have job 2 lined up before you sell the old home).  

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I disagree.  If you are claiming the 50 mile "safe harbor", one of the requirements is "The change in place of employment occurs during the period of the taxpayer's ownership and use of the property as the taxpayer's principal residence".

https://www.law.cornell.edu/cfr/text/26/1.121-3#c

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OK, that is the requirement that (in this case) the taxpayer would have to have job 2 lined up before selling the  old home.  

Note that pub 523 says you qualify if "You had no previous work location and you began a new job at least 50 miles from the home."   That would apply to job 2.  But I agree that in order to claim the partial exclusion, they have to have job 2 lined up before the sale (job 2 has to be one of the reasons for the sale).  Moving without job 2 and taking job 2 later to make ends meet does not qualify for the partial exclusion because the taxpayer didn't move because of the job. 

The taxpayer here did not specify when they took job 2, but reading between the lines, I think it is likely they took it later and therefore don't qualify.  

[Opus 17]

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@Vmmatch wrote:

Hey!

wouldn’t the below still qualify me? Below it says if there was “no current place of employment”

my first job is remote so it doesn’t qualify me

But my 2nd job in the new state is 8 states away from my old residence 

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Publication 523 does not contain the time limit that is contained in the actual law, and if audited, the law applies.   The law says you have to move homes because of the job, and the job change has to occur while you own and occupy the house as your main home.

https://www.law.cornell.edu/cfr/text/26/1.121-3#c

So the question in your situation is, did you sell and move because of the 2nd job?  Or did you sell and move for other reasons, and found the 2nd job later?

[Anonymous_]

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@Opus 17 wrote:

So the question in your situation is, did you sell and move because of the 2nd job?  

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Assume, for the sake of argument, that the move was because of the second job.

Will moving for the second job fall within the safe harbor when nothing with respect to the first (or main) job has changed (e.g., location, rate of pay, et al)? Regardless of the smattering of possible answers to that question potentially put forth, I believe that to be the primary issue here.

[Opus 17]

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@Anonymous_ wrote:

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@Opus 17 wrote:

So the question in your situation is, did you sell and move because of the 2nd job?  

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Assume, for the sake of argument, that the move was because of the second job.

Will moving for the second job fall within the safe harbor when nothing with respect to the first (or main) job has changed (e.g., location, rate of pay, et al)? Regardless of the smattering of possible answers to that question potentially put forth, I believe that to be the primary issue here.

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If you look at the examples given after the regulation in the link provided by @AmeliesUncle , you will see the examples are all focused on whether you moved because of a change in job location.  I don't see any reason why job 1 has any relevance if the reason for the move was the location of job 2.

For example, suppose I am a freelance graphic designer (job 1) living in New York.  I am hired by a company that designs theme park rides, so I move to their location in Florida (job 2), but at the same time, I continue to freelance on non-theme park-related projects.  I see no reason to think that continuing to work from home on my old freelance job would impair my ability to claim the partial exclusion if the primary reason that I moved was to take the new position with employer #2.  (This is a true to life example, by the way—a relative of mine did exactly this.)

Again, for @Vmmatch , the question is did they move because of the 2nd job?  Or was the 2nd job something that was independent of the desire to move.

[Anonymous_]

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@Opus 17 wrote:
If you look at the examples given after the regulation in the link provided by @AmeliesUncle , you will see the examples are all focused on whether you moved because of a change in job location. 

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Yes, I have read those examples and I have noted that every one of them addresses relocating for one job; none mention relocating for the purposes of taking a second job.

Assuming nothing has changed with respect to a current job (or self-employment), such as a reduction in pay, working conditions, et al, then it is difficult to justify invoking the safe harbor to reduce or eliminate capital gains tax on the sale. 

[Anonymous_]

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@Opus 17 wrote:
I don't see any reason why job 1 has any relevance if the reason for the move was the location of job 2.

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You do not see a reason why "job 1 has any relevance"? 

How about the fact that this particular safe harbor was designed to reduce, or eliminate, the economic hardship that would result from having to travel further from the taxpayer's principal residence due to a change in their job location (that is singular) (or seek new employment in a new location due to a change in pay, working conditions, et al at the current job).

I do not believe the safe harbor would apply to a relocation for taking a second job when the reason for doing so is merely to make more money by taking a job in addition to a current job. 

Finally, I firmly believe that, if examined (which is unlikely regardless), the IRS is simply going to inquire as to what, if anything, has changed with respect to the first job. If the taxpayer cannot show that anything has changed, then the exclusion will likely be disallowed.

[Opus 17]

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@Anonymous_ wrote:

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@Opus 17 wrote:
I don't see any reason why job 1 has any relevance if the reason for the move was the location of job 2.

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You do not see a reason why "job 1 has any relevance"? 

How about the fact that this particular safe harbor was designed to reduce, or eliminate, the economic hardship that would result from having to travel further from the taxpayer's principal residence due to a change in their job location (that is singular) (or seek new employment in a new location due to a change in pay, working conditions, et al at the current job).

I do not believe the safe harbor would apply to a relocation for taking a second job when the reason for doing so is merely to make more money by taking a job in addition to a current job. 

Finally, I firmly believe that, if examined (which is unlikely regardless), the IRS is simply going to inquire as to what, if anything, has changed with respect to the first job. If the taxpayer cannot show that anything has changed, then the exclusion will likely be disallowed.

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The law and the regulation just say that you have to change the location of your work, and selling the home must be because of the change of location of work.   I don't see anything in the law that requires you to prioritize one job over the other, or to prioritize income.  For example, if I change job locations to take a new job at lower pay (perhaps because I enjoy the work more), I would still qualify.  The sale of the home is because of the change in job location.

If congress only wanted to grant the partial exclusion when you are moving to make more money, they would have said so.  Why am I penalized for moving to take a lower paying job that I love?  

To make a more current example.  Wade lives in city A, and loses his job with the WXY retail chain because the company closes the store due to too much shoplifting.  Wade starts driving for Uber, and makes a decent living.  Meanwhile Wade is sending resumes all across the country.   Wade lands his dream job in oceanography in city B, but it's an entry level job, so Wade will still have to drive for Uber after moving.  Your argument would bar the partial exclusion unless Wade can prove he earns more at his entry level job than driving for uber.  

I think your argument is reading more into the regulation than is there.  The regulation just says you have to move because of a change in your work location.  It doesn't say you have to change the location of all your jobs (if you have more than one) or that you have to prioritize your jobs by income.

[Vmmatch]

Hi all!

Wow thanks for all the replies on this. I took the 2nd Job a month and a half after moving, so sadly I guess that means I don’t qualify? 
This would be a bummer as I didn’t know what jobs where out here until I got here. 
 
Thanks again 

[Anonymous_]

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@Opus 17 wrote:
If congress only wanted to grant the partial exclusion when you are moving to make more money, they would have said so. 

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It would be best to stick to the facts rather than fabricating different scenarios that alter the basic hypothetical, which is where a taxpayer retains exactly the same job after moving to a new location and takes a second job (whether that second job is secured before or after the move).

There is an enormous potential for abuse here which it appears you are incapable of detecting. I cannot imagine that the IRS would allow the exclusion given the fact pattern presented by @Vmmatch.

[Anonymous_]

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@Opus 17 wrote:

I think your argument is reading more into the regulation than is there. 

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I understand that you are unaware of this since you are neither a tax attorney, tax accountant (or other tax professional), et al, but interpreting the Regulations is precisely what the IRS does in this context.

The Code and Regs cannot address every conceivable set of facts.

[Opus 17]

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@Anonymous_ wrote:

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@Opus 17 wrote:
If congress only wanted to grant the partial exclusion when you are moving to make more money, they would have said so. 

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It would be best to stick to the facts rather than fabricating different scenarios that alter the basic hypothetical, which is where a taxpayer retains exactly the same job after moving to a new location and takes a second job (whether that second job is secured before or after the move).

I still think you are reading too much into the regulation.  There's nothing that says you have to move for your main job, or your only job, or both jobs, or your best paying job.  It says you must move because of a job change, that occurs while you are living in the old home.  

[Anonymous_]

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@Opus 17 wrote:
I still think you are reading too much into the regulation. 

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No offense, but I could not care less whether I am reading too much into the Regulation or, at this point, whether you are not gleaning the basic intent of the Regulation. The IRS that would be the ultimate arbiter here and I am relatively confident on how this scenario would be interpreted (i.e., the way in which abuse would be prevented for future transactions).

As a side note, we have veered off topic since @Vmmatch stated that the second job was taken after moving so it is a nonissue in that instance - no exclusion would be allowed.