Capital gain exclusion

[naiomi82]

I have owned my home for 8 months if I was to loose my job and have to relocate to a different state for work  can I be excluded from paying capital gains taxes??   I paid 285k I owe 183 k I put it 20k in remodeling I wanted to stay for 2 yrs but afraid my job will be cut. I'm in new york state.

[Mike9241]

I have owned my home for 8 months if I was to loose my job and have to relocate to a different state for work  can I be excluded from paying capital gains taxes??   I paid 285k I owe 183 k I put it 20k in remodeling I wanted to stay for 2 yrs but afraid my job will be cut. I'm in new york state.

if you move before owing and occupying the home for 2 years due to a job change you would be entitled to a partial exclusion based on the number of months (you can also use days) owned or lived-in whichever is less divided by 24 months or if you use days 730 days times $250,000 (assuming you're the only owner and not married) 

your mortgage doesn't enter into the calculation of gain or loss but the remodeling costs do. also, closing costs on purchase and selling costs. a loss is not deductible. 

not sure of NY laws

[RobertB4444]

New York follows the federal law in that you will get a partial exclusion on the gain of the sale of your home on both your federal and state tax returns.  

TurboTax will have you enter the dates that you purchased and the dates that you sell and will give you credit for that 20K you spent on remodeling as well as any additional costs of the sale.  Based on the information you have entered you'll get around a third of the exclusion or 80K or so.  

That means that you will only pay tax on the amount above 385K that you receive (minus costs of the sale).  Or thereabouts.

Good luck!

@naiomi82 

[Opus 17]

If you move due to a listed "hardship" you can use a partial exclusion.  Since you need to have lived there 24 months to get the full exclusion, if you sell in 8 months, you qualify for 8/24th the normal exclusion, which is $83,333 if filing single or $166,666 if filing married filing jointly.  (Roughly speaking.  The exact percentage is determined by the number of days you owned the home, or the number of days since you last used the exclusion, whichever is shorter.) Any gain over that is taxable.  

Your basis appears to be 285K plus 20K =305K.  So how much gain you have will depend on the selling price.

You can also adjust your gain by certain expenses of buying and selling, see publication 523.

https://www.irs.gov/forms-pubs/about-publication-523