Selling Primary Residence "2 of 5" Rule Does Not Meet Criteria

[Pamela Garrett]

Hello, I am seeking options regarding a Primary Residence that does not meet the "2 out of 5 year" criteria. My clients sold a home that they lived in for over 2 years and bought another Primary Residence in another state. So, they have already used the tax break with in the 2 year period. Unfortunately, they have only lived in the current Primary Residence they purchased for a little over 8 months. Now, there is some loss of income and the Costs of the home have increased. Also, a side note, the education their child has received has been sub-par due to at home and hybrid classes. They are moving out of state for better income and educational opportunities for their child. Although, with the state of the Real Estate market with very little inventory, they will be renting until they can secure a property to purchase. So, the 45 day rule to apply the proceeds to another Primary residence will not apply, here. I know a 1031 Exchange will not apply, although is there a tax shelter that would apply, since they are applying the proceeds to another Primary Residence?  Thank you for your advice and efforts, I do appreciate them!