IRS Publication 523 — Selling Your Home
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“T aylor had deducted $27,000 for depreciation for the period of rental to a third party. T aylor can’t exclude the part of the gain equal to the depreciation claimed after May 6, 1997, for renting the house ($27,000). This is unrecaptured sec- tion 1250 gain.”
You meet the requirements for a partial exclusion if any of the following health -related events occurred during your time of ownership and residence in the home.
• 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:
1. Parent, grandparent, stepmother, stepfather;
2. Child (including adopted child, eligible foster child, and stepchild), grandchild;
3. Brother, sister, stepsibling;
4. Mother-in-law, father-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law; and
5. 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 their residence.
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