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Capital Gains on sale of a house

By Terry Savage on May 16, 2022 | Housing / Real Estate

A friend in Seattle, working for Walgreens, take a new position with Walgreens in late 2020 that causes her to move to Chicago. She sells her house, netting over $700,000 above her basis. She was told she would be exempt from capital gains of any amount, because she was required to move. Is this a true loophole? If yes, what defines being required?

Terry Says

No, someone told her wrong. If she lived in her home as a principal residence, she is allowed a $250,000 capital gains exclusion on a single return. Or $500,000 on a joint return. She should have known this before moving and asked her employer to give her a moving bonus to cover the taxes. This is a very sad story.

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