Is there capital gains? Sell primary and vacation home, put all proceeds into one new home. Never rented either home. Last 7 years spent 5 months/year in each.

[Bsch4477]

There is a $500,00 (Married filing jointly) capital gain exclusion for the sale of your primary home. You're eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale. You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale. Generally, you're not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.

It would seem that you are eligible for the exclusion for your main home.  The fact that you bought a new home is irrelevant. 

[VolvoGirl]

The old rule about rolling over the gain to a new home ended in May 1997.  Sorry it doesn't matter what you do with the gains or money.  

[xmasbaby0]

Buying another home is irrelevant.  The law that allowed you to avoid capital gains by purchasing another home changed in 1997.   You may be able to exclude gains from the primary home, but not from the second --"vacation" home.

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 Premium software to report the 1099-S

NOTE:   If you have ever used the home as rental property or claimed a home office, you have more information to enter

[pk]

@sporting  while agreeing with my colleagues @xmasbaby0 , @Bsch4477 , @VolvoGirl ,   from your statements, 

 if you claim that you used each of these two properties as your main home for ONLY 5 months each year,  then  you will meet  the 730 days total use requirement  and the 2 year ownership  requirements  ( with a five year look back period).   Thus you could  choose  which house  you want to claim -- only One -- as your main residence ( usually the one with the  actual larger gain.   But either way , you would need to make sure  that you can actually prove that the chosen prop. is the one that  you have  used as your main  residence.

That is my two cents.