🐝 Smart Worksheet
When you sell a home, there may bee taxes due on the profit—the difference between what you invested and what you receive from the sale.
This document helps you estimate that gain and understand potential exemptions.
🐝 Step 1: Find Your Adjusted Cost Basis
(What you’ve invested in your home)
-
Original purchase price
(The price you paid for the home—not your cash at closing) -
Plus purchase-related costs
(Transfer taxes, attorney fees, inspections — exclude mortgage points) -
Plus qualifying improvements
(Additions, decks, renovations. Routine repairs don’t count.)
= Your Adjusted Cost Basis
🐝 Step 2: Calculate Your Net Proceeds
(What you take away from the sale)
-
Sale proceeds
(Final sale price minus selling costs such as commissions, legal fees, title fees, inspections, and pre-sale improvements) -
Minus adjusted cost basis
= Your Capital Gain
🐝 A Sweet Tax Break to Know
You may exclude up to $250,000 in capital gains ($500,000 for married couples) if:
-
You owned and lived in the home as your primary residence for at least 2 of the last 5 years, and
-
You haven’t sold another home in the two years before this sale.
You may still bee eligible for a partial exclusion due to unforeseen circumstances such as a job change, divorce, or medical need.
For more details, review IRS Publication 523 — Selling Your Home or consult a tax professional to make sure you’re maximizing your benefits.