Question

Publication 523 and the Intelligence Community

Forum|Forum|2 years ago
April 23, 2024
1 reply
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I sold a primary residence in May 2023 after living there for 5 years. I made less than 500,000 off the sale, filed taxes jointly with my wife, and thus did not pay capital gains tax.

After I sold that home, I bought another home (my new primary home) in June 2023, where I live in it full time with my wife.

I plan to sell this primary home after living it in for 1 year, but before reaching the two-year residence requirement, so that I can buy another primary home in another state.

I am a civilian member of the Intelligence Community, as outlined in IRS Publication 523, and I am moving to a new duty station for work (greater than 50 miles away).

Assuming capital gains are less than $500,000, do I qualify for a capital gains exemption, given that I sold a primary home in 2023, bought a new home the same year, and plan to sell that second primary home after living in it for 1 year (but less than 2 years) ?

Again, this move will be to another intelligence community duty station.

Any help is appreciated!

Not A Product Question

DoninGA

Employee

Since you are moving for work then you will be able to use the Partial Exclusion on any gain on the sale of your residence.

If you lived in the home for 1 year then your partial exclusion is 12/24 of the gain on the sale.

So if Single the exclusion would be $125,000 and if Married Filing Jointly and both of you lived in the home the exclusion would be $250,000.

A

alireadreanAuthor

Tracking the partial exclusion, but am I eligible for full exclusion given the intelligence community carve out in Publication 523 (Service, Intelligence, and Peace Corps personnel)?

DoninGA

Employee

If you have only owned the home for one year, are you expecting a gain of over $250,000 if married filing jointly under the partial exclusion? Or $500,000 under the full exclusion?

If you are qualified for the full exclusion as described in Publication 523 on page 4 under the the heading of Service, Intelligence, and Peace Corps personnel then you can take the full exclusion.