My house was purchased by my state through eminent domain. They stated many times I am not selling my house. Do I still claim the house as I was selling?

[CherylW]

Yes, you do.

If you've profited (sales price - basis of the house) less than $250,000 ($500,000 if married filing jointly), the gain is not taxable.

See Eligibility test in Pub 523, Selling your Home:  https://www.irs.gov/publications/p523#en_US_2018_publink10008937