Source: The San Diego Union-Tribune
Writer: Robert J. Bruss,
a San Francisco lawyer, broker &
nationally syndicated real estate writer.

Long Commute (August 20, 2006)
In October 2005 I bought my home. but in March 2006 I found an excellent job, which is a 1.5-hour drive from my home. My wife and I have putthe house up for sale and are in the process of moving close to my new job. I know that to et the full $250,000 per owner principal residence sale tax exemption, we must own and occupy the home 24 of the 60 months before its sale. But what are the tax implications in our situation where after only a few months of ownership and occupancy we have to move due to a long commute? Is this an "unforeseen event" so our expected $20,000 net profit will be tax-free?

Sorry, a long commute does not qualify as an unforeseen event so you can claim a partial principal residence sale tax exemption. Your $20,000 net profit will be taxed as ordinary income if you own the house less than 12 months.

If you own it 12 months or longer, then you qualify for the federal long-term capital gain maximum tax rate of 15 percent, plus the applicable state tax.