Proceeds from a sale of home

[Pbell4188]

Part of the proceeds will go to a new residence , $165000 with the balance of 140,000 to my checking account. I am retired so can you tell me how the 140,000 will be taxed.

[DoninGA · Accepted solution]

What you do with the proceeds from the home sale is not relevant. 

The tax code was changed in 1997 so that purchasing another home at the same or higher price of the previous home that was sold to defer capital gains cannot be used.

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)

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.

[xmasbaby0 · Accepted solution]

After tax year 1997, the law that said you could avoid capital gains tax by re-investing in a new home ended.   Since then, what you do with the proceeds of the sale of your primary home has been irrelevant.

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
• .https://ttlc.intuit.com/questions/1901135-i-sold-my-home-at-a-loss-is-this-deductible