The Foreign Service Journal, May 2003

nation (without limiting its ability to consider other possible factors as well): 1) The sale or exchange and the circumstances that brought it about took place in roughly the same time frame; 2) There was a material change in the suitability of the property as the taxpayer’s principal residence; 3) The taxpayer’s financial ability to maintain the property substan- tially changed; 4) The taxpayer’s use of the prop- erty as a residence while he or she owns it; 5) The circumstances that caused the sale or exchange could not be reasonably foreseen when the tax- payer began using the property as a principal residence; or 6) The circumstances that caused the sale or exchange occurred while the taxpayer owned and used the property as a principal residence. Taxpayers who have already paid capital gains tax on the sale of a prin- cipal residence because they did not qualify for a reduced maximum exclusion under previous rules can 22 F O R E I G N S E R V I C E J O U R N A L / M A Y 2 0 0 3 F S F I N A N C E S SHORT TERM FURNISHED APARTMENTS AVAILABLE columbia plaza apartments Capital Living With Comfort and Convenience Beautiful, Spacious Efficiencies, 1 and 2 Bedrooms Utilities Included Complimentary Voice Mail Courtyard Style Plaza Polished Hardwood Floors Private Balconies Huge Walk-In Closets 24 Hour Front Desk Garage Parking Available Shopping on Site Cardkey Entry/Access River Views Minutes to Fine Dining Walk to the Kennedy Center and Georgetown (202) 293-2000 2400 Virginia Ave., N.W. Managed by Polinger, Shannon & Luchs Co. Overall, the new regulations are a boon that could help Foreign Service personnel recover from the previous law’s inflexibility.