If I put all of my net profit on the sale of a second home into a down payment for the purchase of a new second home, does that net profit count as income?

[dvc10n1In-comcast-net]

I sold a second home for $250,000 in May, 2017. The net profit to me was $54,000. I put all of that net profit into the down payment on a new loan for a new second home in June 2017. Am I required to declare the $54,000 as income for 2017?

[Coleen3 · Accepted solution]

Yes. The days of deferring gain by purchasing a more expensive home are a long time passed. 1997 was the last year you could use Form 2119. It is a capital gain that must be reported in 2017.