Newly married, wife's home with equity being sold...taxes?

[Derrick R.]

As the title suggests, my wife owned a house with quite a bit of equity in it and we are in the process of selling. She lived in the residence since it was built a few years ago and just moved out when we were married this past April. We have not rented the property at all.

So, where does that leave us with taxes on the equity once we sell it? Are we required to report it as capital gains? If there are tax implications, would using the money to pay off a portion of our current mortgage help at all?