Reduced Maximum Exclusion

What is the name of your state? CT
I sold my current residence before I owned and lived in it for 2 years. I would still like to take the capital gain tax free, and want to know if this situation will get it for me. I only need about $75k of the $500k allowed (I'm married), so a Reduced Maximum would be ok.

Here is the situation:
My old residence was a 3 floor townhouse, my new residence is a ranch (1 floor). I have severe foot problems, and my doctor wrote a prescription saying that stairs create a hardship for me, etc...
Nowhere does the prescription say: "Patient should move", but I want to know if this will qualify under Publication 523 as a "Health" reason for selling my home which would allow me to take the gain tax free.

Thanks,
PS. I took a capital gain on a prior residence back in '02, so I would have to have my wife take this capital gain herself since mine was <2yrs ago.

Also, my accountant said he would need IRS case law or decisions to back it up if I did try to claim it. Where can I get case law on this topic? (My accountant wants $200/hour to research it for me.)

[abezon]

IRS Pub. 523, page 15:
If a doctor recommends you change your residence to treat/mitigate/cure a disease/illness/injury, "health" is considered to be the primary reason you sold your home & you are eligible for a reduced exclusion.

I think you're fine, but get the Dr. to recommend in writing that you live someplace without stairs.





Feel free to send money. ;D