What are the tax implications of selling my primary residence to fund a down payment on a new home?

Hey there, I totally get your concern about the tax implications of selling your primary residence to fund a down payment on a new home. The good news is that you're eligible for the primary residence exemption, which allows you to exclude up to $250,000 (or $500,000 if you're married) of capital gains from your tax liability.

Since you've lived in your current home for over 10 years, you likely qualify for this exemption. However, it's worth noting that you'll still need to meet certain criteria, such as owning and occupying the home for at least two of the five years leading up to the sale. You'll also need to file Form 121, which helps you determine the gain on your home sale. To minimize your tax liability, consider consulting with a tax professional to review your specific situation and ensure you're taking advantage of all the tax benefits available to you.

As for the tax implications of using the proceeds to fund your new home purchase, you'll need to consider the tax implications of the down payment itself. In most cases, the down payment will be considered non-taxable, but it's always a good idea to run the numbers and consult with a tax professional to ensure you're not missing out on any potential tax savings.

I hope this helps you feel more confident about selling your primary residence and using the proceeds to fund your new home purchase. Just remember to consult with a tax professional and take your time to review the tax implications carefully – it's always better to be safe than sorry when it comes to your finances!