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I bought my house for $247K in 2000 but refinanced and now owe $300K. I've also put in at least $12K in upgrades. I can probably sell the house for $450K, for a profit of $150K.

Should I quickly buy another property so as to avoid taxes on the profit, or should I place the profit in the bank and live off of it? (I'm thinking of quitting my job and doing non-profit work for a year.)

What are your thoughts?

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    I don't think you can avoid taxes if its a personal residence. It has to be a investment property to do an exchange with another investment. – Anthony Russell Apr 6 '15 at 16:14
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    Tax questions require you specify which country. – Chris W. Rea Apr 6 '15 at 16:40
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    How is your gain not $450,000 minus $247,000 minus $12,000? – DJohnM Apr 6 '15 at 17:23
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    @Sherri Does the assumption people having that you're from the US have any basis? You didn't mention what country you're from, and although its usually the Americans that consider their country the only one in the world, $ is used for a currency in many places.. – littleadv Apr 6 '15 at 18:47
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    @AnthonyRussell - If she's in US, and it was a personal residence, no tax at all, given the numbers she shared. – JoeTaxpayer Apr 6 '15 at 20:34
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Using US tax code, given that your profits are less than 250K, given that you lived in that home over two years, then yes the 150K is tax free. That is your money in the US.

Note: I won't get into all of the specifics but basically you need to live somewhere 2 years. You get 250K per person, up to 500K. Most enhancements count as money towards the home. So most/all of your 12k should be discounted. However there is a lot of fine print in this and a lot of interpretation on what is normal upkeep and what is an enhancement.

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    250K single, 500K married. – mhoran_psprep Apr 6 '15 at 18:03
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    $450K - $259K = $191K. More than $150K, but still less than the $250K threshold. – JoeTaxpayer Apr 6 '15 at 20:32

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