CCH Federal Taxation Basic Principles
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Sale of Home Due to Unforeseen Circumstances
If a change in place of employment, health or other unforeseen circumstances precipitate a sale or exchange before any of the three requirements (i.e., the two-year ownership, occupancy or frequency requirements) are satisfied, the exclusion may be prorated. The extent to which “unforeseen circumstances” qualify is to be determined by IRS regulations.
Chapter 11, Exhibit 7a