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Home Sale Tax Calculator

Estimate the capital gains tax owed on a home sale: realized gain after basis and selling costs, then Section 121 exclusion (up to $250k single / $500k joint) for a primary residence.

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Total tax owed

$0

federal + state on the gain

Realized gain

$277,000

sale − costs − basis

Section 121 exclusion

$500,000

if primary residence

Taxable gain

$0

How home sale tax works

Adjusted basis: original purchase + capital improvements ($355,000). Realized gain = sale − selling costs − basis. Section 121 excludes up to $250k single / $500k joint if you've owned and lived there 2 of the last 5 years.

For investment properties, depreciation recapture (25%) plus capital gains apply, and a 1031 exchange can defer both. Confirm specifics with a CPA — this calculator is an estimate, not tax advice.

How to Use

  1. Enter sale price and original purchase price.
  2. Enter capital improvements (additions, renovations — not repairs) added during ownership.
  3. Enter selling costs (commission, transfer tax, title).
  4. Pick filing status and primary-residence eligibility (owned and lived there 2 of last 5 years).
  5. Enter your federal long-term capital gains rate (0%, 15%, or 20% based on income) and state rate.
  6. Read total tax owed on the gain.

Frequently Asked Questions

How does the Section 121 exclusion work?

If you owned and lived in the home as your primary residence for at least 2 of the last 5 years, you can exclude up to $250,000 (single) or $500,000 (married filing jointly) of capital gain from federal tax. State rules vary.

What counts as a capital improvement?

Additions, renovations, new HVAC, new roof, landscaping, energy upgrades — anything that adds to the home's value or extends its useful life. Repairs and maintenance don't add to basis.

What if I rented the home before selling?

If you converted from primary residence to rental, partial Section 121 exclusion may apply. Depreciation taken during the rental period must be recaptured at up to 25%. Get CPA advice — the rules are complex.

What about the Net Investment Income Tax?

High-income sellers (>$200k single / $250k joint MAGI) may owe an additional 3.8% NIIT on the taxable portion. Build it into your federal LTCG rate input or get specific tax advice.

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