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?
Does this qualify under unforeseen circumstances on a home sale less than 24 months apart?
- Thread starter ck37421
- Start date
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.
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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.