In chief counsel advice 200734021, the IRS had to determine at what point a home can be considered destroyed, for purposes of qualifying as a sale eligible for the $250,000 or $500,000 exclusion. In this advice, the taxpayer had a home that was substantially damaged in a natural disaster.

The question was, at what point could this home be deemed to have suffered what the tax law calls “complete destruction”? Lawmakers did not define this term for taxpayers; thus, the ... Log in to view full article.