Updated July 31, 2026. Quick answer: most people who sell a home owe nothing, because the exclusion is large and the ownership and use tests are easier to meet than they look. The cases that produce a real bill are specific and predictable: selling before two years without a qualifying reason, a home that was once a rental and therefore carries depreciation recapture that the exclusion does not cover, a second home which never qualified at all, and a long-held home in an expensive market where the gain simply exceeds the exclusion. Improvements you paid for raise your basis and reduce the gain, but only if you can document them – which is the single most common avoidable error. Start with the calculator, then read the case that matches your situation.
Calculators
- Downsizing in Retirement: Capital Gains Tax Calculator
- Home Sale Capital Gains Exclusion Calculator (Section 121)
- Home Sale Depreciation Recapture Calculator (Unrecaptured Section 1250)
Selling early, or for a job or health reason
- Partial Home Sale Exclusion: Job Change, Health, Unforeseen Circumstances
- Selling a House Before 2 Years: What the Gain Actually Costs
Rentals, second homes and recapture
- Rental Converted to Primary Residence: What the Exclusion Covers
- Second Home vs Primary Residence: Capital Gains Treatment
Inherited homes and divorce
- Selling an Inherited Home: Stepped-Up Basis and Capital Gains
- Selling a House After Divorce: Capital Gains and the Ownership Clock
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