The purchase of another home has no bearing on whether or not you will owe capital gains tax from the sale of the first home.
If you sold your primary personal residence and you lived in and owned the home for at least two years in the five year period on the date of sale, you do not have to report the sale if your gains are less then the exclusion amounts of $250,000 if filing Single or $500,000 if filing Married Filing Jointly (and both lived in the home for two years).
Gain or Loss = Sales Price minus Sales Expenses minus Adjusted Basis (Purchase Price plus the cost of improvements prior to the sale)
Selling cost can include escrow fees, legal fees, real estate agent commissions, advertising costs, and even home staging fees.
If you had a gain greater then the exclusion amounts then you would have to report the sale. Also, if you received a Form 1099-S for the sale either with a gain or a loss, the sale has to be reported. You will need the online TurboTax Premium edition to report the sale if you are using the online editions. Make sure that you indicate that you want the sale of the home reported on your tax return.
Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Less Common Income
On Sale of Home (gain or loss), click the start or update button
Or enter sale of home in the Search box located in the upper right of the program screen. Click on Jump to sale of home
