Deductions & credits

The rule that you could postpone your gain by buying a more expensive home was phased out in 1997.  Now, each transaction stands alone.  If you lived in the home at least two years of the past 5 years and owned it at least 2 years, you qualify to exclude the first $250,000 of gain (or $500,000 if married filing jointly).  Any gain over that is a taxable capital gain.  If you owned and lived in the home less than 2 years, you might qualify for a partial gain depending on the circumstances of why you decided to sell.