Q: Sold my house after only living there 19 months. Used profit for down on new house. Am I going to be taxed on profit?

A: Great question. While it is true, you are not allowed to take the maximum exclusion amount of $250k you might be eligible for some exclusion amount. In order to qualify for some, the reason you moved (the move has to be 50 miles away or more) has to be due to some unforeseen circumstances such as a divorce, change in job, death in the family, or something similar. If that is the case, then you take 19/24 = roughly 80% times the $500k exclusion amount which gives you around $400k in tax free gain on the home.

Here is the link to the pasted information below from publication 523 which explains in greater detail.

https://www.irs.gov/publications/p523

I hope this helps.

) Complete this section only if you have determined that you aren’t eligible for the maximum exclusion but are eligible for a partial exclusion. If you are eligible for a partial exclusion, use this section to determine your exclusion limit.

Step 1 Determine the shortest of the following 3 periods:

1. Your time of residence in the home during the 5-year period leading up to the sale

2. Your time of ownership of the home leading up to the sale

3. The time that has elapsed between the sale and the date you last sold a home for which you took the exclusion

Step 2 Take the smallest period from Step 1 (you may use days or months) and divide that number by 730 (if using days) or 24 (if using months)

Step 3 Multiply the result from Step 2 by $250,000. Stop here if not married filing jointly

Step 4 Repeat Steps 1—3 for your spouse and add the two results

C) Your exclusion limit is $___________. Unless you have taxable gain from business or rental use (see Business or Rental Use of Home ), only gain in excess of this amount is taxable.