Under the new Residential Anti-Flipping Rule, individuals who purchase and sell a residential property within 12 months of their purchase may be subject to tax on any profit from the sale as business income, which is ineligible for either the 50% capital gains rate or the principal residence exemption. Exemptions to the rule include household additions, breakdown of a marriage or partnership, threats to personal safety, changes in employment, insolvency, and involuntary disposition due to natural or human-caused disasters.