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Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 2308
Experience:  Certified Public Accountant
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I am selling my house in omaha nebraska, i've owned it for 1

Customer Question

Hello, i am selling my house in omaha nebraska, i've owned it for 1 year and 7 months. I was hoping to figure out what capital gains tax that i would be liable for. I am hoping to make a profit of around 50k. Thanks!
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: it is my primary residence
Submitted: 3 months ago.
Category: Finance
Expert:  Mark Taylor replied 3 months ago.

Hi, my name is Mark. I will be happy to help you with your questions. Is there a special reason for moving (for a new job or another reason)?

Customer: replied 3 months ago.
just moving, I am getting a divorce
Expert:  Mark Taylor replied 3 months ago.

Please give me a moment to prepare your response.

Expert:  Mark Taylor replied 3 months ago.

The reason why I asked about the reason for selling the home is that you qualify for a partial exclusion. If you lived in the home for 2 or more years you would be eligible to exclude a gain of up to $250,000. At 1 year and 7 months you would be able to exclude a little more than 75% of the $250,000. So you would be eligible to exclude the entire amount.

The IRS allows a partial exclusion for unforeseen circumstance. Below is a description of what are considered unforeseen circumstances.

Unforeseen circumstances are defined by Treas. Reg. § 1.121-3(e)(1) as events the taxpayer could not reasonably have anticipated before purchasing and occupying the residence. Specific-event safe harbors are provided in Treas. Reg. § 1.121-3(e)(2): involuntary conversion of the residence; disasters or acts of war or terrorism damaging the residence; or a qualified individual’s death, unemployment (if eligible for unemployment compensation), change in employment status that results in an inability to pay housing costs and basic living expenses, divorce or legal separation under a decree of divorce or separate maintenance, or a multiple birth. These, however, are hardly all the common life events that can result in the sale or exchange of a home, such as marriage, adoption or other circumstance that results in the addition of dependents to the family. Despite not being specified as safe harbor events, circumstances such as these and others may still qualify as unforeseen. Determining whether fact patterns exhibit the level of unforeseeability necessary to qualify as unforeseen circumstances requires taxpayers and practitioners to exercise their best judgment.

Expert:  Mark Taylor replied 3 months ago.

If this answered your question I would appreciate if you would take a moment to rate my response. This is the only way that I will receive credit for helping you today. There should be stars located above the question. If you have additional questions or need clarification I would be happy to continue the conversation. Thank you.