Instructions For Form N-103 - Sale Of Your Home

INSTRUCTIONS

FORM N-103 (REV. 2012)

Page 2

year suspension period and the 5-year test period

Special rules for joint returns. You can exclude

In both cases, to qualify for a reduced exclu-

can be as long as, but no more than, 15 years. You

up to $500,000 of the gain on the sale of your main

sion, the sale of your main home must be due to

cannot suspend the 5-year period for more than

home if all of the following are true:

one of the following reasons.

one property at a time. You can revoke your choice

• A change in place of employment.

1. You are married and file a joint return for the

to suspend the 5-year period at any time.

year.

• Health.

2. Either you or your spouse meets the ownership

Uniformed services. The uniformed services are:

• Unforseen circumstances.

test.

• The Armed Forces (the Army, Navy, Air Force,

Qualified individual. For purposes of the reduced

3. Both you and your spouse meet the use test.

Marine Corps, and Coast Guard),

maximum exclusion, a qualified individual is any of

4. During the 2-year period ending on the date of

• The commissioned corps of the National Oce-

the following.

the sale, neither you nor your spouse excluded

anic and Atmospheric Administration, and

• You.

gain from the sale of another home.

• The commissioned corps of the Public Health

• Your spouse.

If either spouse does not satisfy all these re-

Service.

quirements, the maximum exclusion that can be

• A co-owner of the home.

Foreign Service member. For purposes of the

claimed by the couple is the total of the maximum

• A person whose main home is the same as

choice to suspend the 5-year test period for own-

exclusions that each spouse would qualify for if

yours.

ership and use, you are a member of the Foreign

not married and the amounts were figured sepa-

Primary reason for sale. One of the three rea-

Service if you are any of the following:

rately. For this purpose, each spouse is treated as

sons above will be considered to be the primary

• A Chief of mission.

owning the property during the period that either

reason you sold your home if either (1) or (2) is

spouse owned the property.

• An Ambassador at large.

true.

• A member of the Senior Foreign Service.

Sale of main home by surviving spouse. If your

1. You qualify under a “safe harbor.” This is a spe-

spouse died and you did not remarry before the

• A Foreign Service officer.

cific set of facts and circumstances that, if ap-

date of sale, you are considered to have owned

plicable, qualifies you to claim a reduced maxi-

• Part of the Foreign Service personnel.

and lived in the property as your main home dur-

mum exclusion. Safe harbors corresponding to

Employee of the intelligence community. For

ing any period of time when your spouse owned

the reasons listed above are described later.

purposes of the choice to suspend the 5-year test

and lived in it as a main home.

2. A safe harbor does not apply, but you can es-

period for ownership and use, you are an em-

tablish, based on facts and circumstances, that

If you meet all of the following requirements, you

ployee of the intelligence community if you are an

the primary reason for the sale is a change in

may qualify to exclude up to $500,000 of any gain

employee of any of the following:

place of employment, health, or unforeseen cir-

from the sale or exchange of your main home.

cumstances.

• The Office of the Director of National Intelli-

• The sale or exchange took place after 2008.

Factors that may be relevant in determining

gence.

• The sale or exchange took place no more than

your primary reason for sale include whether:

• The Central Intelligence Agency.

2 years after the date of death of your spouse.

a. Your sale and the circumstances causing it

• The National Security Agency.

• You have not remarried.

were close in time,

• The Defense Intelligence Agency.

• You and your spouse met the use test at the

b. The circumstances causing your sale oc-

• The National Geospatial-Intelligence Agency.

time of your spouse’s death.

curred during the time you owned and used

• The National Reconnaissance Office and any

the property as your main home,

• You and your spouse met the ownership test at

c. The circumstances causing your sale were

other office within the Department of Defense

the time of your spouse’s death.

not reasonably foreseeable when you be-

for the collection of specialized national intelli-

• Neither you nor your spouse excluded gain from

gan using the property as your main home,

gence through reconnaissance programs.

the sale of another home during the last 2 years

d. Your financial ability to maintain your home

• Any of the intelligence elements of the Army,

before the date of death.

became materially impaired,

the Navy, the Air Force, the Marine Corps, the

The ownership and use tests were described ear-

e. The suitability of your property as a home

Federal Bureau of Investigation, the Depart-

lier.

materially changed, and

ment of Treasury, the Department of Energy,

f. During the time you owned the property,

Home transferred from spouse. If your home

and the Coast Guard.

you used it as your home.

was transferred to you by your spouse (or former

• The Bureau of Intelligence and Research of the

spouse if the transfer was incident to divorce), you

Change in Place of Employment

Department of State.

are considered to have owned it during any period

• Any of the elements of the Department of

You may qualify for a reduced exclusion if the

of time when your spouse owned it.

primary reason for the sale of your main home is

Homeland Security concerned with the analy-

Use of home after divorce. You are considered

a change in the location of employment of a quali-

ses of foreign intelligence information.

to have used property as your main home during

fied individual.

Qualified official extended duty. You are on

any period when:

Employment. For this purpose, employment in-

qualified official extended duty while:

• You owned it, and

cludes the start of work with a new employer or

• Serving at a duty station that is at least 50 miles

• Your spouse or former spouse is allowed to live

continuation of work with the same employer. It

from your main home, or

in it under a divorce or separation instrument

also includes the start or continuation of self-em-

• Living in Government quarters under Govern-

and uses it as his or her main home.

ployment.

ment orders.

Reduced Maximum Exclusion

Distance safe harbor. A change in place of em-

You are on extended duty when you are called

ployment is considered to be the reason you sold

If you fail to meet the requirements to qualify

or ordered to active duty for a period of more than

your home if:

for the $250,000 or $500,000 exclusion, you may

90 days or for an indefinite period.

1. The change occurred during the period you

still qualify for a reduced exclusion. This applies to

Married Persons

owned and used the property as your main

those who:

home, and

If you and your spouse file a joint return for the

• Fail to meet the ownership and use tests, or

2. The new place of employment is at least 50

year of sale and one spouse meets the ownership

• Have used the exclusion within 2 years of sell-

miles farther from the home you sold than the

and use tests, you can exclude up to $250,000 of

ing their current home.

former place of employment (or, if there was no

the gain. (But see Special rules for joint returns,

former place of employment, the distance be-

next.)

Instructions For Form N-103 - Sale Of Your Home - 2012 Page 2

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