Capital Gains And Unforeseen Circumstances
Hello,
I recently read an article in the USA Today (if I'm not mistaken), that was based on Capital Gains Taxes on Real Estate. Mentioned that if you Sale a property because of "Unforeseen Circumstances", you would not have to pay capital gains after sale.
I have a client who purchased a HUD foreclosure single family home in Jan. '03. His job has been cutting back more and more on his hours until he is almost considered part-time, works for the fed govt ironically. He cannot continue to afford the mortgage payment and he is wanting to sale the house and take a job back home in Detriot, MI.
That being said, would his situation quailify as an unforeseen circumstance. His true intension was to buy as primary homestead. The home just appraised for $40,000 more then he paid for it back in Jan.
[addsig]
Change in job location does qualify as an exception to the two year rule. The capital gains exclusion will be prorated for the time your client actually owned and occupied his primary residence prior to the sale.