Home sale capital gains calculator
Enter the sale price, selling costs, what you paid and your improvements. Answer the ownership and use questions to see how much of the gain the home sale exclusion covers, including a partial exclusion.
You
Your spouse
Partial exclusion (only if a test above isn't met)
Estimate only, not tax advice. It doesn't handle depreciation recapture, periods of nonqualified use (such as renting the home out before you lived in it), military and other special rules, or state tax, and it doesn't work out the tax itself. IRS Publication 523 has the full rules; check with a tax professional.
Gain on a home sale is the selling price minus selling expenses, minus your adjusted basis: purchase price, qualifying closing costs and improvements. Under Section 121 you can exclude up to $250,000, or $500,000 married filing jointly, if you owned and lived in the home two of the last five years. Not tax advice.
How to use the home sale capital gains calculator
Enter the sale
Selling price and selling expenses such as commissions, legal fees and advertising.
Enter your basis
Purchase price, purchase closing costs added to basis, improvements and any basis reductions.
Answer the tests
Filing status, the ownership and use tests, and whether a partial exclusion applies.
What the home sale capital gains calculator covers
Gain worksheet
Amount realized, adjusted basis and gain, line by line.
$250,000 or $500,000
The full exclusion when the tests are met, for single or joint filers.
When only one spouse qualifies
The limit is each spouse's own limit added together, as the statute says.
Partial exclusion
The reduced limit for a work move, health reason or unforeseeable event, by months.
Taxable gain estimate
The gain left after the exclusion; the tax itself depends on your return.
- Formula
- Gain = (price − selling expenses) − (purchase price + basis closing costs + improvements − reductions)
- Exclusion
- $250,000; $500,000 married filing jointly when both spouses meet the use test (26 U.S.C. 121)
- Partial exclusion
- $250,000 × shortest qualifying period in months ÷ 24, per person (IRS Pub 523)
- Not covered
- Depreciation recapture, nonqualified use, special military rules and state tax
Questions about the home sale capital gains calculator
How is capital gain on a home sale calculated?
Subtract selling expenses from the selling price to get the amount realized, then subtract your adjusted basis: what you paid, certain purchase closing costs and improvements, less any depreciation or other reductions. $850,000 realized on a $465,000 basis is a $385,000 gain.
Who qualifies for the $250,000 or $500,000 exclusion?
You must have owned the home and lived in it as your main home for at least two years in the five years before the sale, and not excluded gain on another home sold in the two years before. Joint filers get $500,000 when either spouse meets ownership and both meet the use test.
What if only one spouse meets the tests?
The limit is the sum of what each spouse would get if unmarried. If one qualifies fully and the other doesn't qualify at all, the couple can exclude up to $250,000.
What is a partial exclusion?
If the main reason for selling was a work-related move, a health reason or an unforeseeable event, you may exclude part of the gain without meeting the two-year tests. Publication 523 divides the shortest qualifying period by 24 months and multiplies by $250,000: 12 months gives $125,000.
Can I deduct a loss on the sale of my home?
No. A loss on the sale of your main home isn't deductible. If you received a Form 1099-S, the IRS says to report the sale even when there's no taxable gain.
Can Closingbird help with the seller's side of the sale?
Yes, for the transaction. Closingbird keeps the seller's deadlines, documents and parties on the file; tax questions belong with the seller's tax professional.
Guides and features for this step of the deal
Where the rules come from
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