If you sell a house the only money that would be counted as income is the profit on the sale. If you buy another house of greater value within a certain time period you don’t have to claim even the profit as income. Plus, the real estate people have nothing to do with reporting income, only the financial institute loaning the monies and even then I doubt they have control over the seller’s part of the bargain.
I cannot imagine that a real estate sale and or purchase would not need to be reported by someone. Often there is significant money involved and yes many times that money is on paper not actual money, and there may or may not be taxes due when it all shakes out but there are transactions with large down payments and cash transactions so I would think reporting by someone is required. Maybe not every transaction is reported but I would think many are reported. I hope realtors/attorneys/etc. will post how it works.
In California they force the escrow company to withhold as if the entire sale price is profit. You then have to wait until you file your taxes the following year to get back the difference between what they took and the actual net gain.
They're sitting on $83K of my money now, and I have to wait until next year to get some/most of it back.