I sold my home for 160,000 and made a profit of 64,000. I used all proceeds towards a new home. Why is that profit being added to my income for the year?

[DoninGA]

Did you own and live in the home for at least two years in the last five years prior to the date of the sale?

[TomD8]

Also, it used to be that a taxpayer could defer the gain on a home sale if another residence was purchased. If the new residence cost as much or more than the old residence sold for, the tax on the entire gain was deferred.

This provision was repealed by the Taxpayer Relief Act of 1997. 

[fanfare]

1997??

what was I doing in 1997? I can't remember.