Most homeowners who have owned and lived in a home for two of the five years previous to selling it can take tax-free profits up to $500,000 for married couples filing jointly, or up to $250,000 for single individuals. And it doesn't matter which two of the five years the homeowner had occupancy. The two years don't even need to be in a row.

But what if the homeowner doesn't live in the home for the required two years? Recently, the some final and temporary regulations have been changed to answer that question and a few more.

If a homeowner is forced to sell his principal place of residence because of a change in employment, health issues, and some other unforeseen circumstances, he is allowed to take a discounted exclusion. For example, a single taxpayer who lived in a house only one year before the need to sell it arose out of a job relocation would meet 50% of the two-year requirement. The homeowner would therefore be able to use 50% of the full $250,000 exclusion for singles.

While the above explanation might at first seem clear, questions kept cropping up: If it is a married couple, whose employment in the household had to change? Whose health had to be compromised? In what way? And what kinds of events fell into the "unforeseen circumstances" category?

The new guidance has helped clarify the answers. Now, a home sale will be considered related to a change in employment if a qualified person's new place of work is at least 50 miles farther from the old home than the distance between the old workplace and the old home. A qualified person can be the taxpayer, a spouse, a co-owner of the home, or a member of the taxpayer's household.

Acceptable health reasons include disease, illness, or injury of a qualified taxpayer, a spouse, a co-owner of the home, or a member of the taxpayer's household.. It can also include certain other close relatives that require care.

A few "unforeseen circumstances" have been identified, too:

• Death
• Divorce or legal separation
• Becoming eligible for unemployment compensation
• A change in employment that leaves the taxpayer unable to pay the mortgage
• Multiple births resulting from the same pregnancy
• Damage to the residence resulting from a natural or man-made disaster, an act of war, or terrorism
• Condemnation, seizure, or other involuntary conversion of the property.

Other circumstances may also be defined as unforeseen at the discretion of the IRS Commissioner.