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Deductions & credits
You do not have to enter anything for the purchase of the new home, other than the mortgage and property taxes. The purchase of the home does not impact the sale of the previous one.
As far as the sale of the original property goes. As long as you owned and lived in the home for two of the five years before the sale, up to $250,000 of profit is tax-free. And if you’re married and file a joint return, that amount doubles to $500,000.
The two years do not have to be continuous. You could occupy it for six months and qualify for the exclusion.
Be very sure on the dates you occupy it to ensure that that you've completed the entire two year period.
IRS Pub 523: Rules for sale of home
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February 1, 2021
6:03 AM
21,236 Views