Page 10 - Selling Your Home User Guide

9:00 - 12-Dec-2022
Page 5 of 22
Fileid: … tions/p523/2022/a/xml/cycle04/source
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
6. An employee of the intelligence community, Vacant land next to home. You can include the sale of
meaning: vacant land adjacent to the land on which your home sits
a. The Office of the Director of National Intelli- as part of a sale of your home if ALL of the following are
true.
gence, the Central Intelligence Agency, the
National Security Agency, the Defense Intelli- • You owned and used the vacant land as part of your
gence Agency, the National Geospatial-Intelli- home.
gence Agency, or the National Reconnais- • The sale of the vacant land and the sale of your home
sance Office; occurred within 2 years of each other.

b. Any other office within the Department of De- • Both sales either meet the Eligibility Test or qualify for
fense for the collection of specialized national partial tax benefits, as described earlier.
intelligence through reconnaissance pro-
Also, if your sale of vacant land meets all these require-
grams; ments, you must treat that sale and the sale of your home
c. Any of the intelligence elements of the Army, as a single transaction for tax purposes, meaning that you
the Navy, the Air Force, the Marine Corps, the may apply the exclusion only once.
Federal Bureau of Investigation, the Depart-
ment of Treasury, the Department of Energy, Note. However, if you move your home from the land
and the Coast Guard; on which it stood (meaning you relocate the actual physi-
d. The Bureau of Intelligence and Research of cal structure), then that land no longer counts as part of
your home. For example, if you move a mobile home to a
the Department of State; or new lot and sell the old lot, then you can’t treat the sale of
e. Any of the elements of the Department of the old lot as the sale of your home.
Homeland Security concerned with the analy-
ses of foreign intelligence information. Home destroyed or condemned—considerations for
benefits. If an earlier home of yours was destroyed or
Period of suspension. The period of suspension condemned, you may be able to count your time there to-
can’t last more than 10 years. Together, the 10-year sus- ward the ownership and residence test.
pension period and the 5-year test period can be as long If your home was destroyed, see Pub. 547, Casualties,
as, but no more than, 15 years. You can’t suspend the Disasters, or Thefts. If your home was condemned, see
5-year period for more than one property at a time. You Pub. 544, Sales and Other Disposition of Assets.
can revoke your choice to suspend the 5-year period at
any time. Remainder interest. The sale of a remainder interest in
your home is eligible for the exclusion only if both of the
Example 1. You bought a home on May 1, 2006. You following conditions are met.
used it as your main home until August 27, 2009. On Au- • The buyer isn’t a “related party.” A related party can
gust 28, 2009, you went on qualified official extended duty
with the Navy. You didn’t live in the house again before be a related person or a related corporation, trust,
partnership, or other entity that you control or in which
selling it on August 1, 2022. You choose to use the entire
10-year suspension period. Therefore, the suspension pe- you have an interest.
riod would extend back from August 1, 2022, to August 2, • You haven't previously sold an interest in the home for
2012, and the 5-year test period would extend back to Au- which you took the exclusion.
gust 2, 2007. During that period, you owned the house all
5 years and lived in it as your main home from August 2, Like-kind/1031 exchange. If you sold a home that you
2007, until August 28, 2009, a period of more than 24 acquired in a like-kind exchange, then the following test
months. You meet the ownership and use tests because applies.
you owned and lived in the home for at least 2 years dur- You can’t claim the exclusion if:
ing this test period. 1. Either (a) or (b) applies:
Example 2. You bought and moved into a home in a. You acquired your home in a like-kind exchange
2013. You lived in it as your main home for 3 /2 years. For (also known as a section 1031 exchange), or
1
the next 6 years, you didn’t live in it because you were on
qualified official extended duty with the Army. You then b. Your basis in your home is determined by refer-
ence to a previous owner's basis, and that previ-
sold the home at a gain in 2022. To meet the use test, you
choose to suspend the 5-year test period for the 6 years ous owner acquired the property in a like-kind ex-
change (for example, the owner acquired the
you were on qualified official extended duty. This means
you can disregard those 6 years. Therefore, your 5-year home and then gave it to you); and
test period consists of the 5 years before you went on 2. You sold the home within 5 years of the date your
qualified official extended duty. You meet the ownership home was acquired in the like-kind exchange.
and use tests because you owned and lived in the home
for 3 /2 years during this test period. For more information about like-kind exchanges, see Pub.
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544.

Publication 523 (2022) Page 5