I will be using the proceeds toward another home.
The fact that you will use the proceeds toward the purchase of another home does not matter. The criteria for excluding a gain on the sale of a personal residence is dependent upon whether the property was used as your primary residence for at least two of the five years leading up to the date of sale and whether you have used the gain exclusion on the sale of another personal residence within the past two years. There is also the availability of a partial gain exclusion if you do not meet the criteria for a full exclusion, as well as several other exceptions.
Your question unfortunately does not provide sufficient information to provide an answer, but I do recommend that you read IRS Publication 523, Selling Your Home, or consult with a qualified CPA to get a definitive answer in your situation.
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Answered by: Alan M. Schapire, CPA, is a principal with Convergent Financial Strategies LLC in Wayne, Pa.