Sold home when will we get taxed?

Forum|Forum|6 years ago
August 28, 2019
1 reply
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We recently sold our home and took money from the sale to pay down debt and start retirement and have the rest sitting for down payment while we look for another home. We are getting mixed commentary on when and how we will be taxed on the profit from the home sale. Some are saying you have a year to purchase a new home tax free. Some are saying 6 months. Some are telling us we will have to pay tax on the portion we took to pay down debt that isn’t going towards the new home. When and how will this money be taxed? How long do we have to find a new home before it’s taxed? Should we save money for taxes on the money we took to pay down debt?

xmasbaby0

Employee

Buying another home has not made a difference since 1997. What you do with the money from selling your house is irrelevant for your tax return.

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

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**