First the purchase of a new home means nothing on an income tax return ... what you did with the proceeds of the sale is immaterial.
Now ... look at the Sch D again ... do you see the carryover of the prior year loss AND the sale of the home ? Do you see the gain on the home ? Review the sale of home worksheet and see if the gain is reflected correctly.
Do you have some more loss after the gain on the sale is covered ? Look at line 16 ... is the total loss more than $3000? If so you only get to take up to $3000 of cap loss on your return against ordinary income.
