Exceptions to Test 1

You can choose to have the 5-year test period for ownership and use in Test 1 suspended during any period you or your spouse serves outside the United States as a Peace Corps volunteer or serves on qualified official extended duty as a member of the uniformed services or Foreign Service of the United States, as an employee of the intelligence community, or outside the United States as an employee of the Peace Corps. This means you may be able to meet Test 1 even if, because of your service, you didn’t actually use the home as your main home for at least the required 2 years during the 5-year period ending on the date of sale. The 5-year period can’t be extended for more than 10 years.

Example.

You buy a house in Virginia in 2013 and use it as your main home for 3 years. For 8 years, from 2016 through 2024, you served on qualified official extended duty as a member of the uniformed services in Kuwait. In 2025, you sell the house. You didn’t use the house as your main home for at least 2 of the 5 years before the sale. To meet Test 1 , you elect to suspend the 5-year test period during your 8-year period of uniformed service in Kuwait. Because that 8-year period won’t be counted in determining if you used the house as your main home for 2 of the 5 years before the sale, you meet the ownership and use requirements of Test 1 .