Home Sale Capital Gain

[MS1040]

In 2023 I sold my main residence home and bought a replacement main residence within two weeks because of medical reasons. Is it permissible to differ my home sale’s capital gain, provided that I use my previous home's cost basis for any future home sale capital gain?

[DoninGA]

The option to defer capital gains on a home sale by purchasing the new home at the same price or higher as the sale price on the old home was removed from the tax code in 1997.

All the capital gains from the home sale (if any) is reported on the tax return for the year of the sale.

[MS1040]

Thank you!  This is actually what I was aware of.  However, I thought about asking because my home sale (replacement) was necessary because of a medical reason.   Thanks again.

[Mike9241 · Accepted solution]

if you lived in and owned the property for 2 out of 5 years before the sale you get the full home sale exclusion unless there was another home sale within 2 years of this one. so selling for medical reasons doesn't matter if you are entitled to the full exclusion. if not. medical reason for selling would entitle you to a reduced exclusion based on the lesser of period owned or occupied in the two years before sale

[MS1040]

Thank you Mike!