Q. When do you have to pay taxes on proceeds from selling your home?
A. On your tax return for the year you sell it. But, under certain conditions (and amount), you may exclude the gain on the sale of your primary residence*.
Q. Is there a time limit?
A. Yes, see below.
Q. Does the money have to be used on another home?
A. No. That's an old rule for about 1998.
*The capital gain on the sale of your primary home is not taxable (up to $250K, $500K married). To be eligible you must have lived in and owned the home for at least 2 out of the 5 years prior to sale. You do not even need to report it on your tax return, unless you got a tax document, usually a 1099-S. The 1099-S may have been included in your closing documents, instead of arriving in the mail, in Jan. or Feb. of the following year.
