My workplace situation may require that I sell my house and move into an employee-provided apartment.
I have heard that if I sell my house one year, and don't use the money earned to buy another house, I'd be taxed on the earnings as if it were income.
Is there any way I can sell a house, hang onto the money for a future house payment a few years in the future, without having to pay income tax on it?
In the US, once you realize gains it is taxable. So no, there's no way in general.
However, for real estate there are a couple of special rules, one relevant in particular is the primary residence exclusion. The rule is under the IRC Sec. 121, and allows excluding up to $250K ($500K if married filing jointly) of gain from taxable income. In practice for many sellers that would mean a completely tax-free sale of primary residence.
Generally you'd need to live in the house at least 2 years in the 5 years preceding the sale for it to apply, but if the move is job-related then the period may be shorter.
See more details and conditions on the IRS site on this topic (Publication 523).
I have heard that if I sell my house one year, and don't use the money earned to buy another house, I'd be taxed on the earnings as if it were income.
When the law changed in 1997, the roll-over rule ended. Before that change if you put the gains into the next house you could defer the gains, until there was a lump sum provision once you sold after the age of 55.
Is there any way I can sell a house, hang onto the money for a future house payment a few years in the future, without having to pay income tax on it?
All this assumes that this was your principle residence, and it has been for at least 2 of the last 5 years. If it was or is a rental property the tax calculation becomes more complex.
You have to first figure if there are any gains, and if they are taxable. If you met the time requirement, and the gain was less than 250K or 500K (married filing jointly), there will not be any federal capital gains.
If the first approximation of the price you sold the house for minus the amount you paid for the house would exceed the 250K/500K exemption, then you have to look at the details. The details include closing costs involved with the two transactions, and any home improvements such as remodeling a bathroom, adding an addition.
IRS pub 523 has details regarding time lines and what counts as an improvement.
My workplace situation may require that I sell my house and move into an employee-provided apartment.
One thing that was interesting was there still is a partial exclusion for a job related move:
Does Your Home Qualify for a Partial Exclusion of Gain?
If you don't meet the Eligibility Test, you may still qualify for a partial exclusion of gain. You can meet the requirements for a partial exclusion if the main reason for your home sale was a change in workplace location, a health issue, or an unforeseeable event. Work-Related Move
You meet the requirements for a partial exclusion if any of the following events occurred during your time of ownership and residence in the home.
You took or were transferred to a new job in a work location at least 50 miles farther from the home than your old work location. For example, your old work location was 15 miles from the home and your new work location is 65 miles from the home.
You had no previous work location and you began a new job at least 50 miles from the home.
Either of the above is true of your spouse, a co-owner of the home, or anyone else for whom the home was her or his residence.
Note: Ask your employer if the apartment they provide is considered taxable income. There are rules related to that situation.
