Tax implications of buying a second house while still owning my first home?

You're handling this correctly. When you buy a new primary residence while still owning your previous home, the IRS gives you reasonable time to sell the old property. The key thing is your intent - you clearly intend for the new home to be your primary residence and are in the process of selling the old one. For your 2023 taxes, you can deduct mortgage interest from your new home if you itemize deductions (using Schedule A). You can also deduct property taxes paid on both properties, as there's no limit to how many properties you can claim for property tax deductions (though there is a $10,000 cap on total state and local tax deductions, including property taxes). Since you're selling your old home in 2024, any potential capital gains implications would affect next year's taxes. Remember, if the old home was your primary residence for at least 2 of the past 5 years, you can exclude up to $250,000 in capital gains ($500,000 if married filing jointly).

I went through something similar last year and discovered taxr.ai (https://taxr.ai) when I was trying to figure out how to handle my mortgage interest deductions. It really helped clarify which documents I needed to keep for my records when owning two properties simultaneously. Their system analyzes your specific tax situation and tells you exactly which forms you need and how to properly document your primary residence for tax purposes. It also flagged some additional deductions related to my move that I would have completely missed.

I have to admit I was wrong about taxr.ai. After my skeptical comment, I decided to try it out of curiosity. The system actually flagged an issue with how I was documenting my home office in my second property that could have triggered an audit. What really impressed me was the specific guidance about documenting the transition period between properties - something TurboTax never addressed. They provided a checklist of records to keep for both properties that made it super clear. Definitely saved me from making some documentation mistakes that could have been problematic later.

If you're planning to sell your old house and are worried about potential IRS questions regarding which was your primary residence, I'd recommend using Claimyr (https://claimyr.com). I was in the same boat last year and had some questions about capital gains exclusions that weren't clear from online research. Tried calling the IRS directly for weeks but couldn't get through. Claimyr got me connected to an actual IRS agent in about 15 minutes who confirmed exactly how to document my situation. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c - basically skips the endless hold time with the IRS.

I need to publicly eat my words about Claimyr. After my skeptical comment, I decided to try it for my refund issue that I'd been trying to resolve for months. Not only did I get through to an IRS agent in about 20 minutes, but they were able to identify why my refund was delayed (an address mismatch issue) and expedite the process. I've literally spent more time on hold with my cable company than it took to connect with the IRS through this service. For anyone dealing with property tax questions or any IRS issues, this is absolutely worth it just for the time saved alone.

One thing to watch for in your situation is the property tax assessment on your new home. When I bought my second house while still owning my first, the county reassessed the property value of the new home and my property taxes were way higher than what the previous owner had been paying. This might affect your tax planning for next year since you'll only have a partial year of the higher assessment in your 2023 taxes.

Don't forget to keep ALL receipts for any repairs or improvements you made to the old house while preparing it for sale! Those costs can be added to your basis in the home when calculating capital gains when you sell it. I made this mistake and lost out on thousands in tax savings because I couldn't document some major plumbing work I had done.

Just wanted to add something that might help others in this situation - make sure to keep detailed records of when you actually moved into the new house. The IRS looks at "intent to occupy" but also actual occupancy patterns if there's ever a question. I kept a simple log showing when I started sleeping at the new place regularly, when I moved my personal belongings, and when I changed my mailing address. It sounds like overkill, but if you're ever audited, having clear documentation of the transition timeline can save you a lot of headaches. The IRS understands that moves take time, especially when you're trying to prepare an old house for sale, but they want to see that you genuinely intended the new place to be your primary residence. Also, since you mentioned taking longer than expected to clean out the old house - that's totally normal and the IRS recognizes this. Just make sure your documentation supports that the delay was due to practical moving concerns, not because you were treating it as a second home or rental property.