Summary: Understanding tax implications when selling a home with gains, potential exclusions available.

From Yahoo Finance: 2025-04-21 08:30:00

When selling your primary residence, married couples filing together can exclude $500,000 of the gain. Single filers can only exclude $250,000. Long-term capital gain status is key to avoiding taxes on the gain. Speak with a financial advisor to determine your best tax strategy.

Taxes on the sale of a home, like any investment, depend on the gain. Long-term capital gains rates range from 0% to 20% based on income. Special rules apply to primary homes, allowing exclusions of $250,000 for single filers and $500,000 for married joint filers.

Different scenarios illustrate tax implications when selling a primary residence. For example, married couples filing jointly with a $480,000 gain can exclude the full amount and owe no taxes. Single filers may owe a 15% long-term capital gains tax on a portion of the gain.

It’s crucial to calculate your adjusted cost basis when selling a home to accurately determine your net gain. Consider expenses such as agent commissions, legal fees, and home improvements to reduce your taxable gain. Seek a financial advisor’s guidance for personalized tax advice.

Investors can use capital losses to offset gains, lowering their tax bill. Changes in tax laws eliminate options like gain deferral, replacing them with exclusions. Partial exclusions may apply in certain situations, such as relocation or health conditions. Consult with a financial advisor for tax advice tailored to your circumstances.

Read more: Can I Avoid Taxes on the $480k I’ll Net From Downsizing My Home?