Selling and Capital Gains

November 29, 2017
Selling your Home

Capital Gains from a Home Sale and How They are Figured

The Taxpayer Relief Act of 1997 changed the tax laws concerning capital gains on primary residences, and is still in effect. You only pay taxes on any gains over $250,000 ($500,000, if filing jointly) when you sell your primary residence.


Other rules apply, but briefly, this is how the IRS recommends figuring the gain (or loss) on the sale of your primary home:


Subtract your expenses from the selling price to obtain the realized amount.  Expenses typically include commissions, advertising fees, legal fees, and loan charges, such as points.Subtract the adjusted basis (the amount you paid to buy or build it) you made to the basis of your home from the realized amount to get the gain or loss. 


According to the Internal Revenue Service (IRS), you do not have to report the sale of your home on your tax return unless:


You have a gain and you do not qualify to exclude all of it, orYou have a gain and choose not to exclude it.


Otherwise, you must report the gain on Form 1040, Schedule D.


As with any tax information, your personal situation (including such things as divorce) can have major tax implications. And since IRS tax rules change often, you'll want to be sure to consult with a qualified tax specialist.

Staci Davis

Staci was raised on a farm in Toppenish, WA where she learned a strong work ethic from an early age. She worked on the farm, was involved in 4-H, attended school, and worked a job to pay her way through college. Staci attended and graduated from Washington State University in Pullman, WA with a major in Communications with an emphasis in Advertising. She worked as a client account manager at a number of advertising agencies that specialized in marketing, branding, media planning, and lead generation. After dedicating 7 years, she decided to pursue a career where she could excel at a rate that matched her level of work and commitment.


Staci became a licensed real estate professional in 2009 and has had great success, year after year, at a job she is proud to say she loves!  Today, she continues to utilize her college education and business experience to help each of her clients obtain their real estate goals. She specializes in marketing homes and getting them SOLD with a truly integrated marketing strategy, and also really enjoys helping buyers with one of the largest purchases of their life…a home! She is a licensed Real Estate Broker in Washington & Oregon, and is “Your Key To Real Estate Success”!

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