Home Sale Tax Exclusion Scenario Table ($650,000 Sale Price)
| Metric / Step | Single Filer ($250k Cap) | Married Joint ($500k Cap) |
|---|---|---|
| Sale Price | $650,000 | $650,000 |
| Adjusted Basis (Purchase + Upgrades + Costs) | -$380,000 | -$380,000 |
| Total Realized Gain | $270,000 | $270,000 |
| Section 121 Tax-Free Exclusion | -$250,000 | -$270,000 (Up to $500k) |
| Remaining Taxable Capital Gain | $20,000 Taxable | $0.00 TAXABLE (100% Tax-Free) |
Frequently Asked Questions
What is the IRS Section 121 Home Sale Exclusion?
Section 121 allows homeowners to exclude up to $250,000 (single) or $500,000 (married filing jointly) of capital gains from the sale of their primary residence, provided they owned and lived in the home for at least 2 of the 5 years preceding the sale.