rbynaker
Level 13
To narrow it down some, you're looking at Regs under 1.121-3:

https://www.law.cornell.edu/cfr/text/26/1.121-3

You say the sale happened in July 2018 and the commencement of the job happened in July 2018.  Specific dates may matter and, IMO, the sale date is less important than the move date (which may be different and is not mentioned.)

For the safe harbor in (c):

"The change in place of employment occurs during the period of the taxpayer's ownership and use of the property as the taxpayer's principal residence"

If the timing was something like this:

6/15/18 Moved out of Old House to Spouse House
7/1/18 Started new job
7//15/18 Sold Old House

Then the 7/1/18 job commencement occurred during the period of ownership AND use as a principal residence.  So the safe harbor applies (assuming the 50 mi distance test is met).

If the timing was more like:

7/1/18 Started new job
7/15/18 Moved out of Old House to Spouse House
7/16/18 Sold Old House

Then the 7/1/18 job commencement occurred BEFORE the use as a principal residence.  So safe harbor is out and you're left with the gray area of "the primary reason for the sale".  It's facts and circumstances, but every day that goes by stretches the (b)(1) rubber band, "The sale or exchange and the circumstances giving rise to the sale or exchange are proximate in time".  While you can certainly make an argument under audit, I'd recommend they wait out the 2 years to lock this in.

Rick
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