Capital gains when reporting the sale of a home for medical reasons

srigas

My husband and I built a new house on a dirt road in Alabama. We sold it less than two years later because the bumpy dirt road was too much for my husband’s broken back . He sees a neurologist to manage his back pain. We then built a new home on a paved road in Alabama, just a few miles away from the first house. Can I claim moving for medical reasons to avoid the 20% capital gains tax?

KFine3325

Health-related moves are an exception to the ownership requirement. To meet that exception, the following must be true:

• You moved to obtain, provide, or facilitate diagnosis, cure, mitigation, or treatment of disease, illness, or injury for yourself or a family member.
• You moved to obtain or provide medical or personal care for a family member suffering from a disease, illness, or injury. A family member includes your:
  • Parent, grandparent, stepmother, stepfather;
  • Child (including adopted child, eligible foster child, and stepchild), grandchild;
  • Brother, sister, stepbrother, stepsister, half brother, half sister;
  • Mother-in-law, father-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law;
  • Uncle, aunt, nephew, or niece.
• A doctor recommended a change in residence for you because you were experiencing a health problem.
• The above is true of your spouse, a co-owner of the home, or anyone else for whom the home was his or her residence.

https://www.irs.gov/publications/p523#en_US_2022_publink100073098