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Old 08-10-2016, 01:56 AM
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Exclamation Relocation - Sale primary residence

We lived in state OR and own a house. My husband changed his job and moved to NY in 2015, but I didn't move because of my work. We sold our house in May 2015 and bought a new house close to my work in OR in Aug 2015. We used free 500k capital gain for old house when we file tax return for year 2015. After we bought the new house, my husband claim this new house is his primary residency in pay check. Recently, he found another job in state WA. Whole family plans to move there. If we sale our new house now which we lived there less than 2 years, plus we just sold old house last year, can we still use 500k capital gain rule due to job relocation? Any help will be really appreciate!



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Old 08-10-2016, 06:28 AM
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We lived in state OR and own a house. My husband changed his job and moved to NY in 2015, but I didn't move because of my work. We sold our house in May 2015 and bought a new house close to my work in OR in Aug 2015. We used free 500k capital gain for old house when we file tax return for year 2015.====>>correct; To qualify for the home sale exclusion, you don?t have to be living in the house at the time you sell it. Your two years of ownership and use may occur anytime during the five years before the date of the sale. There are certain additional requirements you must meet to qualify for the $500k exclusion. Namely, you must be able to show that you are married and file a joint return for the year of 2015; either you or your spouse meets the ownership test
;both you and your spouse meet the use test, and during the 2-year period ending on the date of the sale, neither you or your spouse excluded gain from the sale of another home.



After we bought the new house, my husband claim this new house is his primary residency in pay check. Recently, he found another job in state WA. Whole family plans to move there. If we sale our new house now which we lived there less than 2 years, plus we just sold old house last year, can we still use 500k capital gain rule due to job relocation?======>Yes but partially as the new house is your primary home so; The IRS clarified a partial $250K/$500K exemption is available for home sales within less than 24 months of ownership and occupancy if the reason for the sale is change of employment location, which qualifies for the moving cost tax deduction, (b) health reasons for illness treatment.Partial exemptions are now available for the situation based on the percentage of the 24-month occupancy time. For example, if you occupied your principal residence for 18 of the required 24 months, and sold due to one of the approved reason, you will then be entitled to 75 %of the $250k to $500k principal residence sale exemption. If you meet all the requirements for the exclusion, you can take the $250k/$500k exclusion any number of times. But you may not use it more than once every 2 years
.



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Old 08-10-2016, 09:16 AM
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Dear Wnhough, thanks for the quick response! I'm still not clear on your commemt:" you may not use it more than twice in two year".
Old house- we lived there for 10 years. Meets the test for capital gain exclusion.
New house- we lived there for 1 year, because of job relocation, it can be prorated for the capital gain exclustion for sure if there is NO old house sale last year. But we sold old house last year, if we sale new house this year. Then we sale two houses in less two years, will the new house still qulify for the prorated capital gain exclusion?



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Old 08-10-2016, 11:19 AM
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Originally Posted by Cake11 View Post
Dear Wnhough, thanks for the quick response! I'm still not clear on your commemt:" you may not use it more than twice in two year".
Old house- we lived there for 10 years. Meets the test for capital gain exclusion.
New house- we lived there for 1 year, because of job relocation, it can be prorated for the capital gain exclustion for sure if there is NO old house sale last year. But we sold old house last year, if we sale new house this year. Then we sale two houses in less two years, will the new house still qulify for the prorated capital gain exclusion?
OK I see what you mean; what I mean is that you CAN GENERALLY CLAIM ONLY ONE exclusion every2 years. However,you, as a taxpayer who disposes of more than one residence within 2 years or who otherwise fails to satisfy the requirements, for example due to a job change may qualify for a reduced exclusion amount -



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