Kendra owns a home in Atlanta. Her company transfers her to Chicago on January 2, 2018, and she sells the Atlanta house in early February 2018. She purchases a residence in Chicago on February 3, 2018. On December 15, 2018, Kendra's company transfers her to Los Angeles. In January 2019, she sells the Chicago residence and purchases a residence in Los Angeles. Because multiple sales have occurred within a two-year period, § 121 treatment does not apply to the sale of the second home.

Question

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Section 121 allows for the exclusion of gain from the sale of a principal residence if the taxpayer meets certain ownership and use tests. However, exceptions exist for unforeseen circumstances, such as a job relocation, which can allow for a partial exclusion even if multiple sales occur within a two-year period.

Kendra Owns a Home in Atlanta