Sold home because of Job Relocation, but didn't own for more than 2 years. What taxes should I prepare to pay due to this event?

[briggsj8]

We recently had to move due to a job relocation from MN to OH.  We only occupied the house for about a year and half.  We purchased the home in MN for $228,000 and sold it for $270,000.

What taxes should I be prepared to pay because we weren't owners for more than 2 years?

Thank you!  

[SweetieJean]

If you owned and lived in the property as your main home for less than 2 years, you can still claim an exclusion in some cases. However, the maximum amount you may be able to exclude will be reduced. One of these is a change in employment.

[briggsj8]

It was our main home of residence while we were in MN.  The exclusion is what I'm trying to gain clarification about, since we only made $42,000 on the sale. Do I need to save some of the profits because I will end up having to pay back taxes.

[Opus 17]

If you moved due to a "hardship" you qualify for a partial exclusion.  For example, if you are married, and lived there 18 months, you can get 18/24th of the $500,000 exclusion, or about $375,000, more than enough to cover you. 

If you did not know that your company or job would probably move when you bought the house, then that qualifies as a hardship.  There will be questions to indicate this on your tax return when you file next spring.

[SweetieJean]

Is it 18/24 of the exclusion, or of the actual gain?

[Opus 17]

Exclusion.

[Adam2323]

I do have a very similar situation I bought a house and lived their with my wife for around 1 year but had to move due to losing my job and getting new job in another city which is more than 50 miles away, I rented the house for one year, hoping to come back but failed to find a job in that city, now I am thinking to sell it, do I qualify for Tax reduction or I will be pay ing the  full  profit gain amount? Appreciate your input and

thanks for the Post owner.

[Hal_Al]

@Adam2323  You qualify for the reduced maximum capital gain exclusion., because you moved for employment reasons.  But, you must sell within 3 years of the move to meet the reduced 2 of 5 rule. 

A portion of your capital gain, known as depreciation recapture, will be taxable, because of  the rental use.

[Revrevis15]

I recently found out I am relocating for work. I have lived in my primary residence in TX for 13 months and will be moving to CT. I expect to make approximately $114k in profits from the sale of my house. How much will I need to prepare to save for taxes? 

[Hal_Al]

Q. What taxes should I prepare to pay due to this event?

A.  None. The total amount will be excludable.

The top amount allowed will be reduced because you were in the home less than the two year rule.  13/24 x $250,000 = 135,400.  Since that's more than your anticipated profit, none will be taxable,