Capital Gains - Unforeseeable Event Partial Exclusion
Hello,
My wife and I decided to sell our home in Feb of 2022 due to her work environment becoming toxic and her employer showing signs of going out of business. As she would either be quitting in a few months or her employer going under, we decided to sell our home and were able to complete the sale in May of 2022. At the time of the sale, we had been living in the home for just over 1 year and would be subject to capital gains tax.
I am curious as to whether we could apply the partial exclusion to capital gains on the home sale as our circumstances may fit the "unforeseeable events" criteria since we sold our home with the plan to downsize due to the upcoming loss of my wife's job. We would not have been able to pay our bills and living expenses on my salary alone. I believe this is an appropriate application of the unforeseeable events clause, however I'm not sure if us being proactive in the sale rather than waiting for the loss of her job would disqualify us (she did end up leaving the company in June due to the toxic environment, and the company let the remaining employees go weeks later).