Capital gains exception on selling a home

Forum|Forum|6 years ago
September 27, 2019
3 replies
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I live in town A, where I live in my home I purchased 19 Months ago. My Wife, as of 3 months ago, now has a new job in town B. She has an apartment in town B, since it is a 2 hr 45 min drive away. She maintains her formal domicile in our home that we own. We are therefore doing a "long distance marriage" for the next few years. We are hoping to sell our home in town A, and move to a smaller town that is about 45 mins closer to one another. Would this count as the "moving for work" exception in terms of paying capital gains (since we'd be selling short of 2 years)?

Anonymous

maybe

the reduce exception applies if the taxpayer's (TP) primary reason for the sale is a change in the location of a qualified individual's (QI) employment. a QI includes TP''s spouse. The employment can be with a new employer or even same employer at a new location

there is a safe harbor based on distance. that is a change in a place of employment is considered to be the primary reason if

1) the change occurred during the period the TP owned and used the property as his/her primary residence

2) the new place of employment is at least 50 miles farther from the TP's former home than the former place of employment was. if your spouse lived 30 miles from her former place of employment her new employment location would need to be at least 80 miles from the home (not the apartment)

this is a safe harbor which means if you meet the two tests, then it is presumed you qualify for the partial exemption because of change of employment.

Even if you don't meet both test, then you may still qualify if you can demonstrate the primary reason for sale, based on facts and circumstances, is work-related, health-related, or unforeseeable. say she fails the mileage test, I think facts and circumstances would show your move is work related.

Anonymous

maybe

there is a safe harbor based on distance. that is a change in a place of employment is considered to be the primary reason if

1) the change occurred during the period the TP owned and used the property as his/her primary residence

2) the new place of employment is at least 50 miles farther from the TP's home than the former place of employment was. if your spouse lived 30 miles from her former place of employment her new employment location would need to be 80 miles from the home (not the apartment she now lives in)

RNV23Author

Thank you for the detailed response.

I will clarify with more details of my own:

Our current home is 150 miles from my wife's new job. So she stays in her apartment near there.

The home we would like to move INTO is 115 miles from her new job, so I would be selling our current home in order to move 35 miles closer to her. My employment status would remain unchanged.

Sounds like that would qualify for the safe harbor . . . yes?