Deductions & credits

If the home was your main residence, it makes no difference what you did with the proceeds. 

 

You may be able to exclude the first $250,000 ($500,000 for a married couple filing jointly) of gain from the sale of your home and avoid paying taxes on it. You need to have owned the home and used it as your main residence for the last two out of five years leading up to the sale (and note that there are exceptions to this general rule).

 

See https://www.irs.gov/publications/p523#en_US_2022_publink100073574