sale of principal residence less than 2 years.

Dear 1031x.com: Recently divorced, sold primary residence where I lived under 2  yrs, will received capital gain (split of profit of approx $160K) of $80K,  will I have any tax implications since I sold this property under 2 yrs?  Your 1031 rep told me today that if primary residence, living at least 1  yr in it, and capital gain under $250K, I will not have any tax  implications, is that correct? I thought there was a minimum of 2 yrs with  penalty fee if sold before 2 yrs.

The IRS has issued taxpayer friendly regulations which state that in the event of unforeseen circumstances sale of principal residence in less than two years will still qualify for the section 121 exclusion. Divorce is one of these unforeseen circumstances.  See temp. reg. 1.121-3T(e)(1).  Sincerely,

Steve Hickox
Attorney / President

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