Capital Gains Tax When Selling Your Home
Understand how capital gains tax works when selling a primary residence and what it means for Bay Area sellers.
Understanding Capital Gains
When you sell your primary residence for a profit, you may qualify for a significant tax exclusion under Section 121 of the tax code.
Important: This guide is educational only. Tax laws are complex — always consult a CPA or tax professional.
Key Points for Sellers
$250K / $500K Exclusion
Single filers can exclude up to $250K; married couples filing jointly can exclude up to $500K of capital gains.
2-of-5-Year Rule
You must have lived in the home as your primary residence for at least 2 of the 5 years before the sale.
Gain Above Exclusion
If your profit exceeds the exclusion, you may owe capital gains tax on the excess amount.
Every 2 Years
Generally, you can claim this exclusion once every 2 years if you meet the requirements.
Questions About Capital Gains?
Thinking About Selling?
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