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emc011075
emc011075, Master Tax Adviser
Category: Capital Gains and Losses
Satisfied Customers: 2579
Experience:  Master Tax Adviser and Enrolled Agent
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I was looking clarification on exclusion from capital gains

Customer Question

I was looking for further clarification on exclusion from capital gains from selling my home after 21 months. I moved to Georgia from California for a job promotion--new position that was created (national sales). I got approval from my company to return to California as I am now handling primarily west coast accounts. I was told the exclusion due to a job relocation wouldn't apply unless my company had a corporate office in California. Is this correct? It doesn't seem right that there needs to be an office if my job in sales allows reps to work remotely and if my primary business is on the west coast, which is why my company approved the relocation. Can anyone clarify? Thanks.
Submitted: 11 months ago.
Category: Capital Gains and Losses
Expert:  emc011075 replied 11 months ago.

Hi. My name is ***** ***** I will be happy to help you.

The exception applies if

  • You took or were transferred to a new job in a work location at least 50 miles farther from home than your old work location.

  • You had no previous work location and you began a new job at least 50 miles from home.

Expert:  emc011075 replied 11 months ago.

There's no requirements for the company to have a corporate office where you are relocating. You could be working from home or at a satellite office, as long as the relocation is for a new assignment and for the company convenience. Meaning, you cannot perform the job from your current location.

From what you are describing you are being transferred for your own convenience, not even because it is the company requirements or policy to continue in your current job. Unfortunately no. The exclusion only apply for circumstances beyond your control. Your doesn't sounds like something that just happened.

Expert:  emc011075 replied 11 months ago.

Any questions?

Expert:  emc011075 replied 11 months ago.

I see you offline now. So if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. You find the rating bar on the top of the page – 5 stars. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.

Customer: replied 11 months ago.
From what I've read, it doesn't seem to have to be a new job, but can be continuation of current job at a new location. Part of my job relocation is convenience, but also because they restructured my position. I am a national account manager for a company. There are three of us, and they have restructured our positions to be more regional, meaning more of my work will be on the west coast, hence less travel expenses for my company to pay for with me there. Because of this, I thought it might qualify?
Expert:  emc011075 replied 11 months ago.

I don't know what your source of information is but IRS publication states that it has to be a new job. Here I am pasting the exceptions again:

- You took or were transferred to a new job in a work location at least 50 miles farther from home than your old work location.

- You had no previous work location and you began a new job at least 50 miles from home.

And here's the source:

https://www.irs.gov/publications/p523/ar02.html#en_US_2015_publink10009003

Usually those exceptions only apply to situations that are beyond your control like financial hardship, sudden illness, loss of job, disaster or finding a new job. But if part of it is for your convenience, you will have to convince the IRS agent that it was more than just convenience. A financial aspect like higher pay (and taxable income) or pay cut or elimination of your current position could be a convincing argument.

When it comes to deductions and exemptions IRS usually don't provide too much details and leave it to tax preparer discretion. If you think you can defend it and you have enough supporting documents to prove it, than take it. You will not have to send any supporting documents with your return but make sure you have it if you need it.

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