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OK, here's the situation:

My husband and I own a small home in CT which we bought from family for well below market value ($75K) 7 months ago. The home appraised at $168K before we updated the kitchen, windows and other various and sundry items. We expect to sell for $200K, which would realize a profit of $125K before we pay the real estate agent commission and other related expenses.

We expect to sell around May of next year, which would put our length of ownership at 12 months; as you know, this is below the minimum of 24 months required for the $500K capital gains tax break for married couples.

I understand from reading the IRS regulations that if we move further than 50 miles away from our original location for employment we can get a modified tax break (we are planning on relocating to NH). Seems that with a modest profit we would be safe from paying capital gains tax.

What are your thoughts?

Some follow-up questions: at what point in the selling/buying process does all this get calculated? Do we need to have a job secured in NH before being eligible for the tax break? Is this a calculation solely for the lenders, or do the agents get involved? What other questions should I be asking??

I did cross-post to the buying/selling a house board, but thought it might be helpful to also get some insight from the tax experts. ;)

Thanks in advance!!
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