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A reduced exclusion is available to anyone who does not meet the full 2 year requirement because of a change in place of employment.
You would calculate the reduced exclusion by multiplying the maximum dollar limitation ($250,000 or $500,000 for qualifying married taxpayers) by a fraction. The numerator of the fraction is the shortest of (1) the time the taxpayer owned the home during the five-year period ending on the date of the home’s sale, (2) the time the taxpayer used the home during the five-year period ending on the date of sale or (3) the time between the date of the prior sale for which gain was excluded and the date of the current sale. The numerator and denominator are expressed in either days or months. If the measure is days, the denominator is 730 days (365 days X 2 years). If the measure is months, the denominator is 24 months.
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