Capital Gains Tax (50 Mile Exclusion)

Forum|Forum|4 years ago
May 6, 2022
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So I’m selling my house. We have lived here for 21 months. I realize you need to live in the home for 2 years to meet the exclusion of capital gains tax. However, my wife worked from home for her job, and then got another job that requires a long commute across the Dallas Fort Worth area . I know that there is a 50 mile rule for a partial exclusion. How is this 50 miles measured? This is not specified in the rule. It just simply says 50 miles further than her last job, which is 0, because she did her work from home. Her normal commute (fastest route) is 54 miles? There are other routes that are also over 50 miles. However the slowest route (non-highway) is less than 50 miles. This route also hardly ever shows up on the GPS as an option. So my question is, do we still qualify or is this measured as-a-crow-flies or what? I’m going off the basis that since they don’t specify in the rule how to measure this, than as long as the normal commute is more than 50 miles than it qualifies. Would I be correct?

Mike9241

the new place of employment is at least 50 miles farther from the taxpayer's former home than the former place of employment reg 1.121-3(c). to be precise it says

The qualified individual's new place of employment is at least 50 miles farther from the residence sold or exchanged than was the former place of employment,

sine the distance from the former place of employment to the home sold is 0, the new job must be 50 miles from the old residence. as you can see the new residence has nothing to do with the mileage test.

neither the regs, code or pub 523 on home sales specifies how the 50 miles is measured. since people do not have wings, I would think as-a-crow flies would not be relevant. My guess would be the route that most people would use.