Capital Gains Tax When Selling Your Home

Exemption for Married Homeowners

When you sell your home, you may be liable for capital gains tax if it has appreciated in value over your ownership period.

Married homeowners pay no tax on the first $500,000 of profit on their home. ($250,000 for single homeowners)

Qualification Criteria

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 of the last five years, before the sale. You can only use this exemption once every two years.

Including Home Improvements in Profit Calculation

When calculating your profit, you may also add the costs and cost basis for any home improvements.

Make sure to contact your tax professional if you have any questions about how capital gains may apply in your situation. Sources:

IRS.gov, October 7 2022

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