MTW wrote:
- quote -

I can not disagree with Mike's or Dean's response. From a
technical point of view, an unforeseen circumstance is left
to the facts and circumstances of the event assuming that
the event does not meet one of the safe harbors described in
the IRS guidance (Temp. Regs.). However, as the definition
of an unforeseen circumstance is defined in the temporary
regs as the occurrence of an event that the taxpayer does
not anticipate before purchasing and occupying the
residence, the probability of convincing the IRS or the tax
court that a raise in pay was never anticipated is just
about zero.

--
Alan
http://taxtopics.net

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A.G. Kalman <glendale202-mtm[at]yahoo.com> wrote:

- quote -

I fully agree that the poster's situation does not meet any
of the SAFE HARBORS listed in applicable regulations.
However, as I understand it, a taxpayer might still attempt
to qualify for a partial exclusion under a "facts and
circumstances" analysis. While this is admittedly an
~incredible~ long shoot, it is nevertheless a possibility
that is specifically permitted by the regulations.

MTW

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A.G. Kalman wrote:
- quote -

Although I agree that the IRS hasn't included it as an
"unforeseen circumstance," that list need not be exhaustive.
What matters is whether or not the Tax Court would buy the
argument, but you don't really want to be the test case, do
you?

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Sharief Youssef wrote:

- quote -

If the unforeseen circumstance that you are referring to is
your raise in pay, then that does not meet the IRS
definition of an unforeseen circumstance that would allow
you to utilize a portion of the $250,000 profit exclusion.
The entire gain on the sale of the townhome is taxable.

--
Alan
http://taxtopics.net

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sharief[at]mac.com (Sharief Youssef) wrote:

- quote -


Mere upgrading isn't one of the defined unforeseen
circumstances that allows you to pro-rate the exclusion.
Allowing what you would like to do would be an open
invitation to a whole class of real estate speculators to
game the system.

You have to have a better reason than that for why it was
necessary for you to move. You have to have moved to take up
a new job far away, or have been forced to move because of
death, divorce, separation, loss of job or income, multiple
births, bona fide medical reasons, or the like.

--
Chris Green

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- quote -

Making more money is not a reason for proration of the
exclusion. A drop in income, yes.

Helen, EA in PA
Member of The Tax Gang
Director, National Assoication of Enrolled Agents
Immediate Past President, PA Society of Enrolled Agents

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I used to own a townhome and lived in it under 1 year. I
received a raise at work and decided to move into a single
family home which I live in now. I still own the townhome
and currently renting it.

My question is because of my unforseen circumbstance, I can
sell my town home for a tax free gain of up to $250,000 (pro
rated verion actually) being single even though I lived in
it under two years.

However, how can I do that now that live in a single family
and I didn't sell that town house before I moved into my
single family???

Thanks,
Sharief

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