Sale of Residence

The IRS changed the sale of residence rules several years ago. The old rule said you had to reinvest the proceeds of the sale into a new home. That is no longer true.

The new rule is that all profit is tax free, up to $500,000. You must have lived in the house for at least five of the previous eight years. It doesn’t matter if you buy another house or not. Also, you don’t have to be 55 or older, like in the old days.