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Maybe, depends on the amount of the profit.
Form 2119 was discontinued by the Taxpayer Relief Act of
1997. Since that time, you can not defer capital gains on a home by buying one
of equal or greater value. What you can do, if you owned and lived in the home
for 2 of the 5 years ending on the sale date, is to not have to pay tax on a
gain of up to $250,000 (Single), or $500,000 (Married Filing Jointly). Note
that if you ever used the home as a rental, then the exclusion does not apply
to any gain equal to the depreciation that you claimed or could have claimed.
For further info, see IRS Pubs, 530, 523, and 17
http://www.irs.gov/pub/irs-pdf/p530.pdf
http://www.irs.gov/pub/irs-pdf/p523.pdf
http://www.irs.gov/pub/irs-pdf/p17.pdf
The TurboTax program will cover this partial exclusion in the Sale of Home interview -
· Click on Federal Taxes
· Click on Wages and Income
· Click on I'll choose what I work on
· Scroll down to Less Common Income
· On Sale of Home (gain or loss), click on the start or update button
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