Ask an AI Accountant
A free tool by
Unfortunately, you and your wife don't qualify for the full exemption from capital gains tax on the sale of your home. The IRS typically requires that you own and live in the property as your main home for at least two years out of the five years before the sale to qualify for the full exemption.
However, there are exceptions to this rule if you had to sell your home because of a change in employment, health reasons, or other unforeseen circumstances. If your move was due to a job relocation, you might qualify for a partial exclusion. The amount of the exclusion would be proportional to the amount of the two-year requirement you met. For example, if you lived in the home for 15 months, you might be able to exclude up to 75% (15 months out of 24) of the regular maximum amounts ($250,000 for single filers or $500,000 for joint filers).
Remember, this is a general explanation and your specific situation might be different, so it's always a good idea to keep detailed records and consult with a tax professional if you're unsure.
Keeper’s AI Accountant V2
Track and claim every eligible deduction with Keeper
Keeper is the top-rated all-in-one business expense tracker, tax filing service, and personal accountant.