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Tax Law (Questions About Taxes)/reduced maxiumum exclusion


I owned my home for 10 years and rented it out for 3.4 years. I had to move out and live with family when I was laid off and collected unemployment starting March 2009.  I rented it and sold it as a short sale in September 2012 and received a 1099C. I tried to sell it sooner but the market was bad. Do I meet criteria for a safe harbor to use the reduced maximum exclusion?  On Form 982 can I use the either exclusion for principal residence or for qualified real property business debt?
Thank you!


Thanks for your question.

You do not meet the exclusion criteria, as the house was not occupied by your as your main home for 24 of the previous 60 months prior to sale.  Since is it not a principal residence, it does qualify as business property.  You will report the COD income and the gain or loss on the sale.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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