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Deductions & credits
@redhottiescottie wrote:
So my taxable income at the end of every year is around $25,000. I sold the home for $500,000. I owed $164,000 on that home. I cleared around $308,000. I immediately purchased another home for $273,000. I lived in the 1st home for 5 years and was my primary residence. I am a widow so I'd fall under the single status.
Your gain has nothing to do with the amount of the loan or the net proceeds. Your gain is the difference between your cost basis (what you originally paid) and the selling price. Both your cost basis and selling price can be adjusted for certain items that are described in publication 523.
https://www.irs.gov/forms-pubs/about-publication-523
Buying a new home doesn't matter. The old rule about rolling the gain from a home into a new home to postpone the tax was eliminated in 1997. Now, if you qualify for the exclusion (as you appear to), the first $250,000 of gain is excluded, and the rest is taxable. Because of your other income, some of the gain will be taxed at zero percent and the rest at 15%.
You need to know your gain, not your proceeds.