I sold my home I had owned for 30 years and downsized to a smaller home. Obviously the price of property has increased dramatically over 30 years and so I have a huge capital gains ($590K). All of that money was used to purchase my smaller home. I can't see where I can record that on my return, and when I researched it, it said that the purchase of your new home is irrelevant to the return and you can only claim for mortgage/interest etc. So I'm left showing a huge CGT, and it shows I owe about $82K in taxes, which I don't have!! I am over 65 years old.
What should I do?
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).
Selling expenses:
Commissions
Appraisal fees
Legal fees
Advertising fees
Home inspections reports
Title insurance
Transfer tax or fees
Geological surveys
Loan origination points paid on behalf of buyer
NOT selling expenses
Mortgage or HELOC payoffs
Rent back costs
Payoffs to creditors
Property tax
HOA fees