If my company moves me to an overseas office and I have to sell my primary residence and buy a new one overseas , am I liable for any capital gains tax from the sale ?

[xmasbaby0]

Purchasing a new home with the gain from the home you sell is irrelevant.   Back before 1997 you could avoid capital gains tax if you sold a home by investing the gain into another home.  That law changed many years ago.

SALE OF HOUSE

If your gain was more than  $250,000 filing Single, or more than $500,000 filing Married Filing Jointly the sale must be reported on your tax return.  Whether you re-invested the gain in to another house is irrelevant.  If you  have a Form 1099-S go to Federal>Wages and Income>Less Common Income>Sale of Home (gain or loss)

If you owned and lived in the home as your primary residence for at least 2 of the last 5 years on the date of the sale, you do not have to report the home sale if the gain is less than $250K filing Single, or less than $500K filing Married Filing Jointly (and you both owned and lived in the home for at least 2 years).

• If you are using online TT, you need Premier or Self-Employed software to report the 1099-S

[NCperson]

@robingadams  as long as you lived in the home for two years of the last 5, the rules are no different if you had just decided on your own to sell your home and move overseas. 

[pk]

@robingadams , having read through the "whole thing" and agreeing with the excellent replies from colleagues @xmasbaby0  and @NCperson , just wanted to point out that the two year ownership requirement  is either one  or both  to own the property for two years while the use requirement is for both spouses/partners for total of 730 days.  There is also the requirement that neither party must have claimed this gain exclusion within the last two years.

Having said that, unless your employer is a govt. entity, you are unable to suspend the use and ownership requirement for a period 10 years ( if I remember right). For the rest of us common folks, you can rent out the property ( as I did when I was abroad) or sell and if required " job required move " clause exclude all or a portion of the gain.  Same situation will occur if  you bought a property abroad when you return from the foreign sojourn.

Does that make sense ?

pk

[Opus 17]

You are responsible to follow the same laws and pay the same tax when selling your home, regardless of the reason for the sale.  As mentioned, you may qualify to exclude part of the gains based on the 2 year/5 year rule.  If you are in the military or foreign service, you get an extension on the time to sell, but whenever you do sell, you follow the same laws on capital gains as everyone else.  There is no special treatment for moving overseas. 

[Carl]

...am I liable for any capital gains tax from the sale ?

Short answer is yes. However, you "may" qualify for an exception that may give you at least a partial exclusion under the "lived in 2 of last 5 years" rule.

First, if you lived in the property as your primary residence for at least 2 years (730 days) of the last 5 years (1826 days) you owned it, then you can exclude up to $250,000 if single, or $500,000 is married filing joint (and you both lived in the house) from taxable income.

If you lived in the property less than 2 years (730 days) and your move is required for employment or continued employment, then you can probably qualify for a partial exclusion based on the number of months you did live in the property as your primary residence. Basically, you can exclude 1/24 of the allowed amount for each month the house was your primary residence.

There are other requirements which I've not addressed here, and you probably most likely will meet those requirements. The program will walk you through it just fine. Just make sure you read everything on every screen as you work it through. The small print does matter - big time.