I agree with guava, I just completed a tax course last semester, and if I remember correctly what guava said is true. As long as it has been your main place of residence for the past two years, and the gain does not exceed 250,000, you should be good. The 401k for sure, if you take it now will be subject to at least a 30% cut in Taxes and Early Withdrawal. If the gain on the house is substantially more than the 401k less the 30%, I'd take the home. ###FutureCPA