Donald C. Reutemann CFP^{^®}, RPA, AIF^{^®}

(518) 688-2223

Tax

Capital Gains Tax When Selling Your Home

In the center there is a small house with a red roof surrounded by trees with the sun peeking over the horizon. Behind it is a dark blue circle with the words “Capital Gains Tax: When Selling Your Home.” The background is light blue with an arrow pointing down under the house. In the foreground of the house, there is a “For Sale” sign out front. Below the house there is text that reads: When you sell your home, you may be liable for capital gains tax if it has appreciated in value over your ownership period.

n the center there is a small house with a red roof surrounded by trees with the sun peeking over the horizon. Behind it is a dark blue circle with the words “Capital Gains Tax: When Selling Your Home.” The background is light blue with an arrow pointing down under the house. In the foreground of the house, there is a “For Sale” sign out front. Below the house there is text that reads: When you sell your home, you may be liable for capital gains tax if it has appreciated in value over your ownership period.

In the center there is a family who is moving houses. There is a mother crouching next to two boxes on the left hand side, a daughter holding a house plant in the middle, and a father holding a box while standing up. Behind the mother there is a dark blue circle with wedding rings and sparkles. And behind the father there is a light pink circle. The background is light blue with an arrow pointing down below the family. Below the family there is text that reads: Married homeowners pay no tax on the first 500,000 dollars of profit on their home. (250,000 dollars for single homeowners).

In the center there is a person wearing overalls and a painter’s cap. They are painting the background as the color transitions from blue to orange with an arrow below the painter. Pictures of mountains and flowers are hanging on the wall on the left hand side. On the right hand side there is a hammer and screwdriver floating. There is also a bureau placed below the tools and a houseplant in the foreground. Behind these images are bright orange and yellow oval shapes. Below the painter there is text that reads: To qualify, you must meet both the ownership test and the use test. That means you’ve owned and used the house as your main home for at least two out of the last five years, before the sale. You can only use this exemption once every two years. When calculating your profit, you may also add the costs and cost basis for any home improvements.

In the center there is a “For Sale” sign that has a “Sold” sign pasted over it. Two hands are shaking in the foreground inside a dark blue circle. The background is orange with an arrow below the sign. Below the sign there is text that reads: This illustration is for informational purposes only and is not a replacement for real-life advice regarding capital gains taxes when selling your home. Make sure to consult your tax professional if you have questions about how capital gains may apply in your situation.

Have A Question About This Topic?

Healthcare Costs in Retirement

Without a solid approach, health care expenses may add up quickly and potentially alter your spending.

Five Most Overlooked Tax Deductions

Five overlooked tax deductions to help manage your tax bill.

Orchestrating Your Retirement Accounts

Getting the instruments of your retirement to work in concert may go far in realizing the retirement you imagine.

View all articles

Annuity Comparison

This calculator compares a hypothetical fixed annuity with an account where the interest is taxed each year.

Paying Off a Credit Card

Enter various payment options and determine how long it may take to pay off a credit card.

Comparing Mortgage Terms

Estimate the total cost in today's dollars of various mortgage alternatives.

View all calculators

5 Smart Investing Principles

Principles that can help create a portfolio designed to pursue investment goals.

Managing Your Lifestyle

Using smart management to get more of what you want and free up assets to invest.

Your Cash Flow Statement

A presentation about managing money: using it, saving it, and even getting credit.

View all presentations

Should You Tap Retirement Savings to Fund College?

There are three things to consider before dipping into retirement savings to pay for college.