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

[saysomethingnice5]

If the relocation is under the same employer, does the exclusion still apply? Said in another way, if I changed roles within the same company and moved to a different state, does the exclusion still apply?

Additionally, my role changed in January but I was given a loose timeline of when I had to move. Can I still use my role change as proof of the new job?

[Hal_Al]

Q. If the relocation is under the same employer, does the exclusion still apply?

A.  Yes. In fact, when moving for the same employer, you on more "solid ground" than when you changed jobs.

Q. Said in another way, if I changed roles within the same company and moved to a different state, does the exclusion still apply?

A. Yes, as long as the relocation was a requirement of the role change. 

Q. Additionally, my role changed in January but I was given a loose timeline of when I had to move. Can I still use my role change as proof of the new job?

A.  Yes, as long as the relocation was an employer requirement and not just for your own convenience.  That is, the new role requires you to be a the new location and could not be done, long term, at the old location. 

[saysomethingnice5]

What if it was more of an employer preference and not a requirement? Meaning, the job COULD be performed in both locations but I was asked to move?

[Opus 17]

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@saysomethingnice5 wrote:

What if it was more of an employer preference and not a requirement? Meaning, the job COULD be performed in both locations but I was asked to move?

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You don't need any specific reason for the job change.  It can be your preference, the employer's request, or employer mandate.  You qualify for the exclusion as long as you change the location where you perform your job, so that the new location is 50 miles farther from your old home than your old job location (50 mile longer commute). 

The one requirement you do have to meet is that you have the new job location before you sell your old home.  For example, you can't sell your home in New York, move to Florida "on spec", find a job in Florida, and claim the move was for the job.  You have to have the new location lined up before you sell the old home.  

[Hal_Al]

Q. What if it was more of an employer preference and not a requirement? Meaning, the job COULD be performed in both locations but I was asked to move?

A. It depends on the details.  What is you do and where do you do it (work from home or at a company  facility). Is the employer paying for the move.  Is there some personal reason for moving. Why does the employer prefer you to be there. What is about the "new role" that makes the new location better.  The employer preferring the new location is probably good enough, if there's a business reason for the preference. 

The TT site says "as long as the sale results from a job change". 

 https://turbotax.intuit.com/tax-tips/jobs-and-career/changing-jobs/L5ElUIrh6

[Opus 17]

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@Hal_Al wrote:

Q. What if it was more of an employer preference and not a requirement? Meaning, the job COULD be performed in both locations but I was asked to move?

A. It depends on the details.  What is you do and where do you do it (work from home or at a company  facility). Is the employer paying for the move.  Is there some personal reason for moving. Why does the employer prefer you to be there. What is about the "new role" that makes the new location better.  The employer preferring the new location is probably good enough, if there's a business reason for the preference. 

The TT site says "as long as the sale results from a job change". 

 https://turbotax.intuit.com/tax-tips/jobs-and-career/changing-jobs/L5ElUIrh6

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I actually had a debate on this site last month and a long research into the actual code and regulations.  You must have the job at the new location before you sell the old house.  (Or at least a commitment or contract, if you haven't started work yet.)

Example 1: John works at Cornell University in NY state, and John is offered a job at UCLA.  If John moves to California and sells his Cornell house before the 2 years are up, John will qualify for a partial exclusion.

Example 2: John works at Cornell University in NY state but hates the weather, and moves to southern California, and sells his NY house when he moves.  John sends out resumes, and 6 months after moving, John accepts a job at UCLA.  John does NOT qualify for the partial exclusion on the sale of the Cornell house, because he did not have a new job that was 50 miles away from his old home when he sold the old home.  (Even though changing jobs was one of the reasons he moved, he did not have the new job when he sold the old house.)

Example 3: John works at Cornell University in NY state but hates the weather, and moves to southern California. John keeps the house in Cornell as an air-bnb to see how things work out in California.  6 months after moving, John accepts a job at UCLA, and then puts his Cornell house on the market.  John would qualify for the partial exclusion, because he sold the house after accepting the new job that was more than 50 miles away.  

[Matthewkoch5950]

Hi! We bought a home and lived in it for 22 months, then work asked me to transfer 71 miles away. They then transferred me. I was previously 7 miles from work. We then sold after the 22 month mark. We made about 71k and then used the entire profit to purchase a house closer to my new work. So the difference is 64 miles. Am I able to get the hardship for moving since it was over 50 miles? My work locations are on the work profile as I work for a large company in the east. 

[Hal_Al]

@Matthewkoch5950 

Q. Am I able to exclude the gain ($71K) on the sale of mu home, since it was over 50 miles? 

A. Yes. 

Since you owned and  lived in the home 22 months, the maximum amount you can exclude is $458K (22/24 x $500 = 458).  Since that is more than your actual gain, you can exclude the whole $71K. 

The rule is that your new work place must be 50 miles further from you old home than your old work place. So even if your old work place was in the opposite direction, you meet the 50 mile rule (71-7=64) 

It's not clear what "My work locations are on the work profile" means. 

[Matthewkoch5950]

I meant it more along the lines that my work locations are on my work profile as proof that I was transferred with the correct address. Thank you so much! It was a good work opportunity and I’m glad we can not have to worry about the stress of taxes. 

[Matthewkoch5950]

It was meant like there is documented proof that I moved locations. I work for a retailer in the East and the store they asked me to move to did not have the position I currently am, so they asked if I would move to take the position. I started the position June 4th, and my house sold June 27th. We never saw the profit as it went into escrow and was used for the new down payment on the new house we purchased. 

[Hal_Al]

@Matthewkoch5950  You're good.  It was not neccessary that you used the gain to buy a new house (that's an old [20+ years ago] rule). 

[capitalgainshelp]

Hello, 

I hope its not too late to chime in with a question. In 2022, I worked remotely for an organization based about 70 miles from my home. I then got a new job in the same city as my old job was based (about 5 miles away), but it required me to go into work every day. If I consider my home address as my workplace, then my new job was more than 50 miles away.  I sold my house after getting the new job and moved closer to work (less than 2 years of ownership). Will the IRS consider my home address as my workplace address for the comparison for partial exclusion or will they compare my old job organization official address to the new job address? 

Thank you for the help. 

[Hal_Al]

Q. If I consider my home address as my workplace, then my new job was more than 50 miles away. Is this the correct interpretation?

A.  Yes, if it's clear that your home is your principal place of business (POB). 

https://www.irs.gov/pub/irs-pdf/p587.pdf (page 3) POB defined

[PattiF]

It depends,  was the remote work temporary for the pandemic, or was the official worksite a location outside the geographical location of the home office?

First of all, let’s make sure your definition and the government’s definition of a remote worker are one and the same. Remote workers are those who are employed by a business but whose official worksite is a location outside the geographical location of that business. A teleworker, or remote worker, performs all work at an alternative worksite, such as the worker’s home.

If you are temporarily working from home due to the pandemic or any other emergency situation, you are not officially a remote worker because your official worksite is still your employer’s geographical location. If it is expected that you will return to that worksite at some point, you are not considered a remote or telecommuting worker for official purposes such as taxes.

@capitalgainshelp 

[capitalgainshelp]

Thank you for the replies. Prior to COVID we were able to work from home. With the job in general, we were on the road often going to various locations across the state, so we were able to work from home when needed due to that flexible schedule. The amount of time spent working at home did shift to 100% during COVID. I do have a "flexible work agreement" signed with working from home officially indicated for 4 out of 5 days of the week. On paper 1 day of the week I was written to be in the official office, although we did not follow that schedule in practice. I definitely considered my home my work location. It seems like it is not completely clear on the IRS website how it would qualify.