Does this qualify under unforeseen circumstances on a home sale less than 24 months apart?


Joined
Mar 3, 2013
Messages
5
Reaction score
0
Person A sold her primary home in May of 2020, and the tax exemption was taken, and a bigger home was purchased that same month. The purchase was made with the understanding that person B, their fiancé, was moving in and when they got married in October 2021 the then husband would be added to the deed once married. The engagement was dissolved in September 2021 and without person B contributing to the expenses person A could not afford the expenses. So the home was sold in November of 2021 at just shy of 18 months. From what I understand, because the broken engagement could not have been reasonably anticipated, the sale is by reason of unforeseen circumstances and person A is entitled to claim a reduced exclusion under section 121(c)(2). Am I correct in my understanding?
 
Ad

Advertisements

BIG E

VIP Member
Joined
Dec 19, 2020
Messages
132
Reaction score
16
Country
United States
Was he contributing to the house expenses during the time before they were supposed to get married?
 
Joined
Mar 3, 2013
Messages
5
Reaction score
0
Although not on the deed or mortgage, he was contributing 50% toward the monthly home bills during that 17 months. The size of the home was purchased in anticipation of starting a family and a 4 bedroom home for a single person didn’t make sense given the change in circumstances. The location of the home was also more advantageous to the fiancée’s place of business than for person A.
 
Last edited:

BIG E

VIP Member
Joined
Dec 19, 2020
Messages
132
Reaction score
16
Country
United States
It seems like Person A does qualify for the partial exclusion based on "unforeseen circumstances".
If she wasn't going to marry, would she have sold her former house?
 
Ad

Advertisements

Joined
Mar 3, 2013
Messages
5
Reaction score
0
The former home was a smaller home in an better area for a single person and closer to her place of employment. She went from 1300 sf with a smaller lot to over 2400 sf and a much larger lot which is way more than needed if it was just her. If they hadn’t planned on getting married and starting a family she said she would have had no plan to sell her former home.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top