| Course | AC256 Federal Tax |
|---|---|
| Unit | Unit 8 |
| Paper type | Tax research memo |
| Length | About 780 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Accounting |
| Updated | October 2026 |
Free sample paper for AC256 Unit 8
Fourteen Months and a Job 180 Miles Away: A Unit 8 Tax Research Memo on a Partial Home Sale Exclusion
[Student Name]
Purdue University Global
AC256: Federal Tax
Unit 8 Tax Research Memo
[Instructor Name]
[Date]
The client, the home and the figures are composite; the statute, regulation and IRS publication cited are real.
Header
To: Supervising accountant From: Staff accountant Date: February 10, 2026 Subject: Section 121 exclusion on Avery Moss's sale of her residence after fourteen months
Facts
Avery Moss, a single taxpayer, bought a house on June 1, 2024, for $310,000 and moved in that day. In June 2025 her employer offered her a position at its regional office, 180 miles from the house; her old office had been 12 miles away. She accepted, moved, and sold the house on August 1, 2025, for $352,000 net of selling costs, a gain of $42,000. She has not excluded gain on any other home sale in the past two years.
Issue
Can Avery exclude any of the $42,000 gain under Section 121 when she owned and used the house for only fourteen months?
Conclusion
Yes. Avery fails the full two-year ownership and use tests, but she qualifies for a reduced exclusion because she sold by reason of a change in place of employment. Her maximum reduced exclusion is $145,833, so the entire $42,000 gain is excluded and nothing is reported as taxable gain.
Analysis
The general rule. Section 121(a) excludes up to $250,000 of gain for a single taxpayer whose ownership of the home, and use of it as a main home, each add up to at least 24 months inside the 60 months before she sells (Exclusion of Gain From Sale of Principal Residence, 2024). Avery owned and used the house for fourteen months, so the full exclusion is unavailable.
The exception. Section 121(c) allows a reduced maximum exclusion when a move for work, a health reason or certain unforeseen events causes the sale. The question is whether Avery's sale was by reason of her new job.
The safe harbor. Treasury Regulation section 1.121-3(c) treats a sale as by reason of a change in place of employment if the new place of work is at least 50 miles farther from the old residence than the former place of work was, and the change occurs while the taxpayer owns and uses the home (Treasury Regulation 1.121-3, 2024). Avery's new office is 180 miles from the house; the old one was 12 miles away. The new office is 168 miles farther, well beyond 50. The change occurred while she owned and lived in the house.
Because Avery meets the distance safe harbor, the memo does not need to weigh facts and circumstances; the regulation treats her sale as caused by the job change as a matter of rule.
The computation. The reduced maximum is the full $250,000 times the fraction of two years she met the tests: 14 months over 24 months, or $250,000 times 0.5833, which equals $145,833. Her $42,000 gain is below that amount, so all of it is excluded (Internal Revenue Service, 2025).
Further Points
The reduced exclusion is a reduced maximum, not a reduced share of the gain; graders and clients often confuse the two. Had Avery's gain been $160,000, $145,833 would be excluded and $14,167 would be taxable long-term capital gain, since she held the house more than a year. Because no gain is taxable, the sale need not be reported unless she receives a Form 1099-S; if she does, she should report the sale and the exclusion on Form 8949 and Schedule D.
Alternatives Considered
Two other routes were considered and rejected as unnecessary. First, the health and unforeseen circumstances exceptions do not apply on these facts, and relying on them would require evidence the file does not contain. Second, Avery could have rented the house out rather than selling it, but that would have started a period of nonqualified use and depreciation that complicates any later exclusion. Because the employment safe harbor applies cleanly, the memo rests on it alone.
Effect on the Return
No gain appears in income, so Avery's 2025 adjusted gross income is unaffected by the sale. The closing agent's Form 1099-S, if issued, will report the gross sales price before selling costs; the return must then show the sale, the $310,000 basis plus improvements if any, and the exclusion code, so the IRS matching program does not treat the proceeds as unreported income.
Recommendation
Retain the closing statement, the offer letter showing the new office's address and start date, and a mileage printout for both offices, so the safe harbor can be shown if the return is examined.
References
Exclusion of Gain From Sale of Principal Residence, 26 U.S.C. § 121 (2024).
Internal Revenue Service. (2025). Selling your home (Publication 523). https://www.irs.gov/publications/p523
Treasury Regulation 1.121-3, 26 C.F.R. § 1.121-3 (2024).
What the AC256 Unit 8 assignment asks for
The eighth AC256 unit asks for a research memo on a specific tax question. Use the standard layout: a header with to, from, date and subject; facts stated briefly and completely; the issue as one question; a conclusion that answers it in a few sentences; and an analysis that applies the authority to the facts. Start the analysis from the statute, then the regulation or ruling that settles the point, and show each element against the facts. Compute any amount the conclusion depends on. Address alternatives or facts that would change the answer. End with a recommendation and the records needed to support the position. Keep the memo to two or three pages. Cite the Code, regulations and IRS publications in APA 7, using primary authority for every legal point.
Inside the AC256 Unit 8 example
The sample's header addresses a supervising accountant. Five facts give purchase and sale dates, distances to both offices and the gain. The issue asks whether any exclusion is available after fourteen months. The conclusion says yes, under the reduced maximum. The analysis states the general two-year rule, the Section 121(c) exception for a change in place of employment, and the regulation's 50-mile safe harbor, then applies each to Avery's facts. The highlighted sentence explains why meeting the safe harbor ends the inquiry. The computation reaches $145,833. Sections on further points, alternatives considered and the effect on the return follow, and a recommendation lists the closing statement, offer letter and mileage proof.
AC256 Unit 8 rubric: what earns full points
Research memos are graded on correct identification of the issue, correct authority and a clear application of law to facts. The conclusion should appear before the analysis and answer the question directly. Citing the statute and the controlling regulation, rather than a publication alone, shows research skill. Each element of the rule should be matched to a fact. Computations must be correct, and the reduced maximum must be applied as a ceiling. Addressing facts that would change the result earns judgment credit. A recommendation on documentation shows practical sense. Memo format, a dated header and APA 7 citations to the statute, the regulation and Publication 523 finish the grade.
Common AC256 Unit 8 mistakes, and how to avoid them
The most common Section 121 memo error is reducing the gain by the 14-over-24 fraction instead of reducing the maximum exclusion. Others miss the safe harbor and argue facts and circumstances unnecessarily. The distance test is measured from the new home instead of the old residence. Conclusions are buried at the end. Publications are cited as authority. Records are not mentioned, though the safe harbor depends on them, and an examiner will ask for the offer letter and both office addresses before accepting the distance. If you have a research question and the facts, a writer can prepare the memo with the authority applied to your client.
Get an AC256 Unit 8 example written to your instructions
Forward the research question your Unit 8 assignment poses, any facts it adds and the rubric, along with any memo template the course provides. The memo is drafted conclusion-first with every authority cited to its section and year, and it comes back within 24-48h. A first custom sample is free, with an invented homeowner at its center. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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AC256 Unit 8 questions, answered
Does the conclusion really go before the analysis?
In most tax research formats, yes. The standard layout runs facts, issue, conclusion and analysis, so a reader who needs only the answer finds it early. The analysis then earns the conclusion rather than building toward a surprise. If your section prescribes a different order, the example's parts can be rearranged without rewriting any of them.
Are revenue rulings and court cases needed, or only the Code?
It depends on the issue. Where the statute and a regulation settle the question, as they do for the composite home sale, further authority adds weight but not substance. Where the Code is silent or ambiguous, rulings and cases carry the analysis. The example lists the regulation and notes that no conflicting ruling was found, which is itself a finding worth stating.
What additional facts would change the answer?
A new job closer than the safe harbor distance, a sale for a reason the regulation does not recognize, or an exclusion already claimed on another home within two years would each change the analysis. The example closes with a paragraph naming these, because a memo that shows its sensitivity to facts is more useful to the reader who has to act on it.
Where can I find a free AC256 Unit 8 sample paper?
A complete AC256 Unit 8 tax research memo is on this page, concluding that a home sold after fourteen months qualifies for a reduced Section 121 exclusion that covers the whole gain.
How is the reduced exclusion computed in the AC256 Unit 8 sample?
The $250,000 maximum for a single filer is multiplied by 14 months over 24, giving $145,833. The client's $42,000 gain is below that ceiling, so all of it is excluded.