Exclusion on sale of residence

[oceanlovin'ea]

TTB says that tp must live in house 2 of last 5 years in order to take exclusion. What if the house was only built 1 1/2 years ago and they rented before then?

What would be the circumstances if they bought another house due to moving to another area? What if they rented when they moved?

Thanks.

Linda F

[Matt Sova]

Moving before 2 years

If they are moving for a job change and the distance test is met (same test as moving expenses) then they can take a reduced exclusion. # days lived / 730 x 500k (if filing joint). If they rent after they move they still get the exclusion.

If they are moving just to move to another area then there is no exclusion.