Rose,

To the best of my knowledge, the IRS will require you to file a Sale of Home form for the tax year the home is sold. The instructions for that form may provide some of the answer you're looking for, Real estate agents are not experts in Tax or CPA's which is why everyone (including myself) is referring you to someone in those professions. http://www.irs.gov/taxtopics/tc701.html

You really should check with your accountant about your specific situation. If your live in your home 2 out of the last 5 years and the home is under $500,000 you typically do not pay capital gains. It really has nothing to do with it being a 1st time home. The IRS looks at many things, that is why we recommend calling your accountant.

Ed & Cindy Knight
Realty Executives e-Group
info@EdandCindyKnight.com


Ed and Cind

The capital gains depends on if it is your primary residence or investment property. Also how long you may have lived there/or how long you have owned it. Then there is the fact that you may reinvest the gain
in another home. There is a limit on how much you can sell your residence for and avoid capital gains. This to changes depending on if you are single or married.
Maybe you need to talk with your tax preparer or CPA.