As most readers are aware, current tax law allows us in certain circumstances to take a part of our taxable gains exclusion, even if we haven't lived in the home in question for a full two years. If, for example, we've lived in it a cumulative 12 months, then we may be able to take half of the full exclusion. Thus, married couples filing jointly can exclude up to $250,000 in gain from taxation (half of what they could exclude had they lived in the home the full cumulative two years) and a single head of household can exclude up to $125,000.

Fine and good−but what are the "certain circumstances" that allow us to take a partial exclusion? They are "unforeseen circumstances," as CPA Diane Kennedy explains, and they are "defined liberally. They include, for example, natural disasters, a change in employment or becoming self-employed, divorce or legal separation, and multiple births from the same pregnancy."

Note, for example, "a change in employment." This literally can include a promotion, a demotion, a change of your role in your current job, or the creation of a home business. The IRS has made it difficult not to enjoy this exclusion from gains taxation. Don't give up! Be sure to consult your tax advisor. For assistance with real estate transactions call Beth at 425-450-5208 and visit her website at www.bethbillington.com.

Beth Billington is a Realtor® with Coldwell Banker Bain in Bellevue, WA.