Capital Gains on home

[kt50at36072]

We lived in our home for 35 years. We sold this home and took the money and bought another home within 2 months. Does this help up off set the capital gain?

[DoninGA]

No it does not.  The option to purchase another home after the sale of the previous home at the same or higher price then the sale price of the first home to defer the gains was removed from the tax code in 1997.

Any gains over your exclusion amount are long term capital gains and must be reported on your tax return.

[kt50at36072]

No matter if you reinvest the entire capital gain. It use to be you had to reinvest before 18 months. 

[DoninGA]

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@kt50at36072 wrote:

No matter if you reinvest the entire capital gain. It use to be you had to reinvest before 18 months. 

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No.  The tax code changed many years ago.  The gains from the sale of a personal residence cannot be deferred in any way.

[DoninGA]

If you are referring to a 1031 exchange that is only the gains from investment property.

[rtfletcher841]

Please see information regarding Section 121 Exclusion. Since the home you sold was your primary residence for a period of greater than two out of the last five years, you can exclude capital gains of up to $500,000 if filing a joint return. If the home was used for business purposes the exclusion is not allowed.