Do we qualify for partial exclusion for 2023 sell of primary residence

Forum|Forum|2 years ago
April 9, 2024
1 reply
0 views

Order of events:

Purchased a Georgia home in April 2020 (cash purchase, not as a like kind exchange).

In January 2023 I quit my employer. March 2023 told my husband I wanted us to move back to Texas.

We listed the Georgia home in April 2023 and contacted our Realtor in Texas with instructions to begin looking for a new home in Houston.

We told my realtor it may take my husband up to a year to find a new job in Texas then move there.

On 05 May 2023 the house in Georgia sold (we only lived there 18 months out of the 36 months we owned this home).
Then we purchased a new home in Texas a few days later on 12 May 2023.

I (the unemployed wife) moved to Texas immediately, my husband worked remotely in Texas until less than 6 months later (in October 2023) he found his new employer with a NASA major contractor in Texas, leaving his old employer an Air Force major contractor in Georgia.

Will this >50 mile move to his new job location qualify for the partial 18 of 24 months exclusion, even though it took him a little less than 6 months to find his new job in Texas?

We did take a partial exclusion less than 2 years earlier (31-May-21) due to a change in jobs/unemployment and then a > 50 miles relocation from Florida to Georgia.

Best answer by DMarkM1

It does not appear you would meet the partial exclusion test for a work-related move. Publication 523 (extracted below) states:

"You meet the requirements for a partial exclusion if any of the following events occurred during your time of ownership and residence in the home.

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. For example, your old work location was 15 miles from the home and your new work location is 65 miles from the home."

It would appear you nor your spouse had ownership or residence in the home when the new job was obtained more than 50 miles away.

DMarkM1Answer

It does not appear you would meet the partial exclusion test for a work-related move. Publication 523 (extracted below) states:

"You meet the requirements for a partial exclusion if any of the following events occurred during your time of ownership and residence in the home.

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. For example, your old work location was 15 miles from the home and your new work location is 65 miles from the home."

It would appear you nor your spouse had ownership or residence in the home when the new job was obtained more than 50 miles away.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

howjltxAuthor

I was afraid of this; we did own the property for several years so I will be able to claim it as long-term capital gains, I think.

DianeW777

Yes, since you have held the property long term, capital gain will be applied to the sale automatically by TurboTax, even thou the partial exclusion does not apply as indicated by our Tax Expert @DMarkM1.

@howjltx

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"