Home sales exclusion for a senior in a nursing home

[1040xwhoops]

After purchasing her home in 1995, my mom moved into a nursing home in 8/2013 due to her requirement for 24-hour assistance. Her home sat empty until she sold it on 6/1/2018. Therefore, she only partially met the residency requirement - two out of the 24 months. This seems to go against the spirit of the law, but perhaps there is no accommodation. I would like to hear your thoughts. Thank you.

[NCperson]

you should be 'in the clear'; the law does have a heart! 

see IRS link below - page  3 

https://www.irs.gov/pub/irs-pdf/p523.pdf

any time you spent living in a care facility (such as a nursing home) counts toward your residence requirement, so long as the facility
has a license from a state or other political entity to care for people with your condition.

so what this says to me is that assuming your mother's nursing home was licensed by the state, she technically lived in the home continuously from 1995 until the date of sale for the purpose of the residency test. She should meet the 24 month residency test! 

[1040xwhoops]

From IRS Publication 523 (2018), page 3 (https://www.irs.gov/pub/irs-pdf/p523.pdf:( "If you become physically or mentally unable to
care for yourself, you only need to show that your home was your residence for 12 months out of the 5 years leading up to the date of sale. In addition, any time you spent living in a care facility (such as a nursing home) counts toward your residence requirement, so long as the facility has a license from a state or other political entity to care for people with your condition."

Therefore, I will answer Yes to the interview question, "Did you live in the home sold for at least two years (24 months) since June 1, 2013?".

When I had previously answered No to that question, I was asked, "Did you sell this home because of any of the following reasons?" and selected "Change of health". TurboTax did not provide, through that choice, the exemption that is clearly allowed  by the IRS.

Is this the correct method in TT to account for this exemption?

[NCperson · Accepted solution]

agreed; i would also answer 'yes' to the question

there is a subtle difference in the text you pasted, which may be the difference in how TT is asking the questions.

you could be disabled or impaired and living with a family member , then the 12 months of the last 60 month test is in play

but if you are in a nursing home, it's as if you never left your home for purposes of the IRS residency test.  

[1040xwhoops]

Thank you for your help, NCperson!