Question

Last year, Sherri bought a home in Atlanta. She is now considering selling her home and buying a new one. Sherri is not sure whether she can qualify for any exclusion of the gain on the sale of her Atlanta home. Under which of the following circumstances would Sherri not qualify for an exclusion?

a. She sells her house because she has accepted a new job in New York City. Her last job was in Atlanta.
b. She sells her house because she is bothered by the loud noise from a nearby airport.
c. She sells her house because her personal physician recommend that she move to West Virginia due to the air in Atlanta causing her asthma to get worse.
d. She sells her house because her cat has arthritis and cannot walk down the stairs in the home.

Answer 1

Sherri may qualify for an exclusion if she sells her house due to accepting a new job, but not for other reasons such as noise pollution or health concerns. Meeting ownership and residence requirements are crucial for eligibility.

Step-by-step explanation:

Sherri may qualify for an exclusion of the gain on the sale of her Atlanta home if she meets certain criteria. According to the tax laws in the United States, individuals can qualify for a capital gains exclusion if they have owned and lived in the home as their primary residence for at least two out of the five years before the sale. In this case:

1. A. Sherri sells her house because she has accepted a new job in New York City. Her last job was in Atlanta.

Sherri may qualify for an exclusion in this scenario, as the reason for selling is due to a change in employment. If she meets the ownership and residence requirements, she can exclude up to $250,000 of the gain on the sale of her home ($500,000 if she is married and filing jointly).

On the other hand, the reasons stated in options B, C, and D are not typically eligible for an exclusion. Noise pollution from an airport (option B), a personal doctor's recommendation to move (option C), and a pet's health condition (option D) are not considered qualifying reasons for the exclusion.