When you sell your home, what you do with the proceeds is immaterial. If you have a gain, it's taxable. Period.
However, if you qualify for the "lived in as my primary residence for 2 of the last 5 years I owned it" rule, then you can exclude up to $250K ($500K if filing joint) from being taxed. Basically, if the home was your primary residence for at least 730 days of the last 1826 days you owned it, counting back from the closing date of the sale, then you would qualify for this exception. See page 2 of IRS Publication 523 at https://www.irs.gov/pub/irs-pdf/p523.pdf starting in the 2nd column, section titled "Does Your Home Sale Qualify for the Exclusion of Gain?"
