Home Sale Capital Gain

[Hockey19]

I sold my primary residence home 8/12/19. I had owned the home for over 4 years and qualified for capital gains exclusion. We then bought a new home. We sold the new home on 4/2/21 die to taking a new job and relocating out of state (over 50 miles away). I have read that you can only use the home sale capital gains exclusion once every two years. My realtor said we should quality for an exemption to the exclusion because we sold the home in less than two years due to a job relocation. Is this accurate? I wanted to verify before doing this years taxes.

[Mike9241 · Accepted solution]

smart realtor.  s(he) is correct. while normally the HSE can only be used once every two years, there is a partial exclusion available if the reason for the sale is a change in job locations.  your situation should present no problems for Turbotax.

formula for exclusion

1) $500,000

2) number of days or months used as principal residence

3) number of  days or months at least one of you owned it

4) smaller of 2 or 3

5) number of days or months between this home sale and last home sale

6) smaller of 4 or 5

7) divide line 6 by 730 if using days or 24 if using months (should be less than 1.000)

😎 exclusion  line 1 times line 7 

[LELM]

@Mike9241,

Can you advise?

I sold my primary house in Mar2021 and purchased new one due to downsizing.  Profit is under $500K and I don't get any 1099-S.

Then my parents decided to move into active living apartment, so I sold their house in July2021.  The house is under my name because I paid everything for it in the past 11 years. Profit is not over $100K.  I got from 1099-S for this second house. 

I file Married joint return with my husband. Our AGI is $195K. Is there a way to avoid capital gain tax on the selling of my second house if I have proof of my dad live there and it is not investment property?

[ZoltanB45]

You may qualify for a partial exclusion if one of the following is met

1. You took or were transferred to a new job in a work location at least 50 miles farther from the home than your old work location. 

2. You had no previous work location and you began a new job at least 50 miles from the home.

3. 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.

Basically, your new job must be an additional 50 miles further from your home than your old job. I am attaching a link with guidance from the IRS site. 

partial exclusion