Selling a home

Buying another personal residence after the sale of the prior residence is not reported on a tax return.  The income received from the sale of the former residence is not relevant in regards to the purchase of the next residence.

The option to defer the capital gains on the sale of a residence by purchasing another personal residence for the same price or higher than the sales price of the prior residence was removed from the tax code in 1997.

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.

The sale of your current home is completely unrelated to the purchase of your new home. They are two separate transactions for tax purposes.

When you sell your home, you may be able to exclude up to $250,000 ($500,000 if married filing jointly if you meet the following conditions:

1. Ownership - you should have owned the home for at least 2 years out of the last 5 years
2. Residence - you must have lived in the home for at least 2 out of the last 5 years
3. Look-Back - you must not have sold another home and claimed the exclusion within the last 2 years

For a more detailed discussion, please refer to this link: Tax Aspects of Home Ownership: Selling a Home - TurboTax Tax Tips & Videos (intuit.com)

The new home will have no impact on your taxes other than the deduction of mortgage interest and property taxes.