@annco9 wrote:
If I understand the answer, reinvesting in another residence has no impact on calculating the capital gains. Is that correct?
Correct.
Up until 1997, it was possible to postpone paying capital gains tax if you bought a more expensive home. That provision was removed from the tax law in 1997, and it would not have applied to buying a less expensive home in any case. (And in fact, if you bought your present home before 1997 and postponed the gain from the home before that, you have some adjustments to make on the capital gains calculation, see publication 523).
There are also some tax rules about "exchanging" properties, but that only applies to businesses, rentals and other income-producing property.
