I sold two houses and bought a new house

[arozbayani]

To whom it may concern

I sold my primary residence for a capital gains amount of $116,000 (of which I received 85 and my ex-wife received the rest) and sold an investment property for $154,000 (my ex-wife received 89 and I received the rest). I had to split the earnings with my ex-wife and used a lot of what I earned into getting a new primary house. Could I claim the gains from the investment property as the down payment of my new house while not being taxed on what I earned from the sale of my primary home (I lived there for four years and it's less than the 250,000 that's tax free)? How would I handle such a scenario? 

[NCperson]

each transaction stands on it's own... and there is no tax (if any) until a property is sold.

your primary residence gains are tax free since you lived in it at least 2 of the past 5 years (and the gain was less than $500,000).

the investment property is subject to capital gains tax.

the new primary residence - there are no tax consequences to the purchase.

[Carl]

The rule that let you defer capital gains tax if you used the proceeds to buy another house, expired back in 2010. So the home sale stands on it's own. The only way the gain is not taxable, is if it was your primary residence for at least 2 of the last 5 years you owned it. You get a $250K capital gains tax exclusion, and your ex gets a $250K exclusion if "both" of you meet the residency requirement.

For the investment property, that sale stands on it's own. You will pay taxes on any and all realized gain. Additionally, you will be taxed on all recaptured depreciation, *no* *matter* *what*. The recaptured depreciation will be taxed anywhere from 0% to a maximum of 25%