How long do I have before the IRS taxes me on net proceeds from home sale?

PrissyPanda's response is incorrect. Replacing your home within 24 months will not prevent the gain from being taxed. However, as others have said, any gain under $250k (if you're single) or $500k (if you're married) will not be taxed as long as you have owned and lived in the house for 2 of the last 5 years.

If you are single and the GAIN(profit) on the sale is under $250,000 you do not even have to report the sale. Put the money in the bank.

If you file married, filing jointly, the same is true but the exclusion goes up to $500,000. If the gain on the saleis less than that you are no longer required to report the sale.

(the form that home sales used to be reported on is no longer published)

If, however, yourgain exceeds those limits, then the tax is a straight 15% capital gain.

To add to Peedah's comment (which is correct) if your gain exceeds those limits you'll settle up with Uncle Sam on April 15, 2007 at the latest. If you know that you'll owe taxes on it, you should make an estimated payment on Form 1040ES for 15% of the excess gain to avoid any penalties. Taxes are technically due when the income is received or the gain is realized.

You have 24 months to replace your old home with a new one before you would have to pay tax on the gain over the $250,000 or $500,000 exemptions.

If the gain is 250,000 or less (or 500,000 for married filing jointly) you can exclude the gain from your taxes completely as long as you satisfy some ownership rules. Check out www.irs.gov publication 523 for more info.

When you report your capitol gaines.