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If you are asking if you can use the proceeds from the sale and in invest it into a new home to avoid capital gains, than the answer is no. You will not avoid capital gains by using the proceeds to buy/improve your new residence.
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Well it depends. Your house you sold, did you own it and used it as a primary residence for at least two out of 5 years prior the sale? You may be eligible for an exclusion and depending on your tax bracket (including capital gains) it can be taxed between 0 - 20%.
In that case you can exclude up to 250K (500K if filing jointly) from your capital gains.
Now you need to determine your tax bracket. What's your filing status and your total income, including the remaining capital gains?
Ok. Thank you. You will make 28K after the 250K exclusion?
Ok. Let me ask this way. How much did you pay for the house and how much did you sold it for?
Ok. Thank you. After applying the exclusion you do not have any capital gains to report. If you got 1099S from a broker or transfer company, you will need to report it on your tax return, but you will report it as 0 gains. Did you receive any 1099S or other tax form related to the sale?
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