Q:

Kerry,

 

   I live in the state of Arizona and bought a new home 13 months ago.  I'm in the process of buying a second home and would like to sell my current home,  but I'm worried that I will be hit hard with a capitol gains tax at the end of the year for selling my first home before the 2 year mark.  I came across your website that was filled with great information which I also read on the IRS webpage.  Do you know where I can find more information about the  'pro-rated exclusion ' listed on your webpage.  I know of the three main categories (health, work, or other unforeseen circumstances.) ,but I want to know more about the specific excuses that are acceptable for each of the categories.  I have some reasons for moving to the other side of town, but I'm not sure if they would pass for legitimate claims to get the exclusion.

 

Thanks,

 A:

 It would be impossible for IRS to list every single reason to justify the use of the pro-rated exclusion; so I wouldn't hold my breath waiting for that to be released.

Those main categories are very wide, especially the "unforeseen circumstances" one.  If something unexpected has changed in your life since you bought your current house that requires you to move, you should be okay.

Check with your personal tax advisor for more specific planning.

Good luck.

Kerry Kerstetter 

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 3/31/2005 05:41:00 PM Send this post: