Has anyone dealt with proving the "unforeseen circumstances" part of this? We're in a similar boat but our move was due to a family health issue, not a job change. We lived in our home for 22 months before having to move to care for an ill parent. Trying to figure out if we qualify for a similar partial exemption.

Just wanted to add one more consideration that I learned the hard way - make sure you understand the timing of when your "2 out of 5 years" period is measured. The IRS looks at the 5-year period ending on the date of sale, not when you moved out. So if you sell in 2024, they look at 2019-2024 to see if you lived there for 2 years during that window. In your case, since you lived there for 18 months and are selling relatively soon after moving, you're clearly within the window. But I've seen people get tripped up thinking the 5-year period starts when they moved out, when it actually ends when they sell. Also, regarding the depreciation recapture that Yuki mentioned - don't forget you can potentially offset some of that with any capital improvements you made to the property while living there. Keep receipts for things like new HVAC, roof repairs, major renovations, etc. Those can be added to your cost basis and reduce your overall taxable gain. Good luck with the sale! Sounds like you've got a solid case for the partial exemption.

My sister got a property as a gift and the tax assessor's office somehow found out and reassessed the property value, which caused the property taxes to skyrocket! Make sure you check with your local tax assessor to see if the gift transfer will trigger a reassessment in your area.

Great point about potential property tax reassessment! This is something that varies significantly by state and locality. In Colorado specifically, gift transfers between family members sometimes qualify for certain exemptions from reassessment, but it's definitely not automatic. You'll want to contact the county assessor's office where the cabin is located to understand their specific policies. Also, since this is a vacation property rather than your primary residence, you'll want to be aware that if you decide to rent it out at any point, that rental income will be taxable. But you'd also be able to deduct legitimate expenses like maintenance, repairs, property management fees, and depreciation. Just another consideration for your long-term planning with this property!

Based on your detailed description, you have an extremely strong case for the Bona Fide Residence Test. Your situation checks all the major boxes: continuous residence since 2012, permanent resident status since 2016, property ownership, and strong ties to your foreign country without maintaining a US home. The flexibility you're seeking is exactly what the Bona Fide Residence Test provides - it's designed for people like you who have genuinely established their life abroad but need occasional US travel flexibility. The Physical Presence Test is really better suited for shorter-term assignments or digital nomads. Don't worry about the audit concern. Switching tests is completely legitimate when your circumstances support it, and your documentation is solid. The IRS actually prefers the Bona Fide Residence Test for long-term expats because it demonstrates genuine commitment to foreign residence. One suggestion: start keeping a simple travel log documenting the purpose of your US visits (work, family, etc.) and evidence of your intent to return to your foreign home. This creates a clear paper trail showing the temporary nature of your US trips. Your permanent resident visa and property ownership are particularly strong evidence. You're making the right move!

Your situation is absolutely perfect for the Bona Fide Residence Test! I made this exact switch three years ago when I was living in the Philippines, and it was one of the best tax decisions I've made. The key factors that make your case so strong: - 13+ years of continuous residence (since 2012) - Official permanent resident status since 2016 - Property ownership (even leasehold counts) - No maintained US home - Clear intent to remain abroad long-term I was initially nervous about the switch too, but the IRS guidance is actually very clear that people can qualify under different tests at different times as their circumstances evolve. Your documentation looks solid. One practical tip: when you file Form 2555 using the Bona Fide Residence Test, make sure to attach a brief statement explaining your residence history and ties to your foreign country. I included a simple timeline showing my visa progression, property purchase, and community involvement. It helps paint the complete picture. The flexibility you'll gain is worth it - I can now visit the US for extended periods without constantly counting days or worrying about losing my exclusion. Your permanent resident visa gives you an even stronger position than most expats have. Go for it! Your case is as straightforward as they come for the Bona Fide Residence Test.

I filed on January 28th, got accepted January 29th, and my refund hit my bank account this morning (February 20th). My cycle code has ended in 03 for the past three years. I checked my transcript on February 15th and saw my DDD was set for February 20th. So based on my experience, you should see movement very soon - possibly by this Thursday's update (February 22nd) with a potential deposit date of February 28th.

Thank you all for the detailed responses! This community is incredibly helpful. Based on everyone's input, it sounds like my cycle code 03 should indeed be weekly processing with Thursday transcript updates. I'm encouraged by @Alexander Zeus's timeline since we filed so close together. I'll definitely check my transcript tomorrow (Thursday) and hope to see that TC 846 code with a DDD. The medical expenses aren't critical until next week, so if I get a deposit date for February 28th like suggested, that would work perfectly. I'll update this thread once I see movement - fingers crossed! Really appreciate everyone taking the time to share their experiences and knowledge about the IRS processing patterns.

I recently went through this exact process and found out something important that hasn't been mentioned yet. If you use any accounting software for payroll (like QuickBooks, Gusto, etc.), they usually require your EIN and legal business name to match EXACTLY what the IRS has on file. So even if you decide to wait for the IRS to process your name change, you might run into issues with your payroll software rejecting submissions in the meantime. When I called my payroll provider, they suggested adding the LLC as a "DBA" of the sole proprietorship in their system as a temporary workaround.

One thing I learned the hard way when I went through a similar transition is to keep detailed records of EVERYTHING during this process. I recommend creating a folder with copies of all correspondence with the IRS, your original EIN confirmation letter, your LLC formation documents, and any letters you send regarding the name change. The reason this is so important is that if there are any discrepancies or issues down the road, you'll need to be able to prove the timeline of your business structure change and that you followed proper procedures. I had an issue 18 months later where the IRS questioned some of my filings, and having that paper trail saved me from potential penalties. Also, make sure you're consistent with how you sign all tax documents during this transition period. Use your legal name as the member-manager of the LLC, not your old sole proprietor signature, even though you're using the same EIN. This helps establish the proper chain of authority for your business entity.