No, you should not have to pay tax on your $25,000 gain if you meet all of the following three tests:
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Ownership: You must have owned the home for at least two years during the five years prior to the date of your sale.
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Use: You must have used the home you are selling as your principal residence for at least two of the five years prior to the date of sale.
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Timing: You have not excluded the gain on the sale of another home within two years prior to this sale.
No, you do not have to put the $25,000 gain toward the purchase of your next home.
To find out more about selling your home, please see: Selling
Your Home
