From:  David
Date:  Sun, 11 Jul 2004
Subject:  Taxes

My employment has been relocated to Dallas, Texas. We need to sell our residence after living here just over a year. Is the gain taxable?

Answer

Date:  Fri, Jul 30, 2004

Hello David,

There is a hardship exception when you move because of a change of employment. The exclusion is reduced. The reduced exclusion is computed by multiplying the maximum allowable exclusion ($250,000 or $500,000) by a fraction. The numerator of the fraction is the shortest of (a) the period of time the individual owned the property as a principal residence during the five-year period ending on the date of the sale or exchange; (b) the period of time the individual used the property as a principal residence during the five-year period; or (c) the period between the date of the most recent prior sale or exchange to which the exclusion applied and the date of the current sale or exchange. The numerator may be expressed as days or months. The denominator of the fraction is 730 days or 24 months (to correlate with the numerator.)

Good luck!
Mike Gray

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