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Publication 523
taxmap/pubs/p523-006.htm#en_us_publink1000200831

Special Situations(p26)

For Use in Tax Year 2013
rule
The situations that follow may affect your exclusion.
taxmap/pubs/p523-006.htm#en_us_publink1000200832

Sale of home acquired in a like-kind exchange.(p26)

For Use in Tax Year 2013
rule
You cannot claim the exclusion if:Gain from a like-kind exchange is not taxable at the time of the exchange. This means that gain will not be taxed until you sell or otherwise dispose of the property you receive. To defer gain from a like-kind exchange, you must have exchanged business or investment property for business or investment property of a like kind. For more information about like-kind exchanges, see Publication 544.
taxmap/pubs/p523-006.htm#en_us_publink1000200833

Home relinquished in a like-kind exchange.(p26)

For Use in Tax Year 2013
rule
The same tests that apply to determine if you qualify to exclude gain from the sale of your main home (discussed earlier) also apply to determine if you qualify to exclude gain from the exchange of your main home for another property. Under certain circumstances, you may meet the requirements for both the exclusion of gain from the exchange of a main home and the nonrecognition of gain from a like-kind exchange (discussed above under Sale of home acquired in a like-kind exchange). This can occur if you used your property as your main home for a period before the exchange that meets the use test, but at the time of the exchange, you used your home for business or rental purposes. This can also occur if you used your main home partly for business or rental purposes and then exchanged the home. In these situations, you would first exclude the gain from the sale of your main home to the extent allowable, and then apply the nonrecognition of gain provisions of section 1031 for like-kind exchanges to defer any remaining gain. For more information, see Revenue Procedure 2005-14, 2005-7 I.R.B. 528, available at www.irs.gov/irb/2005-07_IRB/ar10.html.
taxmap/pubs/p523-006.htm#en_us_publink1000200834

Expatriates.(p26)

For Use in Tax Year 2013
rule
You cannot claim the exclusion if the expatriation tax applies to you. The expatriation tax applies to certain U.S. citizens who have renounced their citizenship (and to certain long-term residents who have ended their residency). For more information about the expatriation tax, see chapter 4 of Publication 519, U.S. Tax Guide for Aliens.
taxmap/pubs/p523-006.htm#en_us_publink1000200836

Home destroyed or condemned.(p26)

For Use in Tax Year 2013
rule
If your home was destroyed or condemned, any gain (for example, because of insurance proceeds you received) qualifies for the exclusion.
Any part of the gain that cannot be excluded (because it is more than the maximum exclusion) can be postponed under the rules explained in:
taxmap/pubs/p523-006.htm#en_us_publink1000200837

Sale of remainder interest.(p26)

For Use in Tax Year 2013
rule
Subject to the other rules in this publication, you can choose to exclude gain from the sale of a remainder interest in your home. If you make this choice, you cannot choose to exclude gain from your sale of any other interest in the home that you sell separately.
taxmap/pubs/p523-006.htm#en_us_publink1000200838
Exception for sales to related persons.(p26)
You cannot exclude gain from the sale of a remainder interest in your home to a related person. Related persons include your brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc.), and lineal descendants (children, grandchildren, etc.). Related persons also include certain corporations, partnerships, trusts, and exempt organizations.