My husband and I sold a house in July 2005 after living in the house a little over 3 years. I was curious what type of tax forms I need to use and if I can take into consideration a second mortgage that we had on the house?

If you had a gain of less than $500,000 on the sale, ($500k for a married couple, $250k for single) you do not have to report the sale on your tax return. The second mortgage- If you took out the second mortgage to do home improvements or repairs, then that interest is deductible on your schedule A (along w/ the interest from the 1st mortgage) if you itemize on your return.

Well done, Lee Anne.

I could not have explained it better!