Clients ask me a lot of questions about capital gains and how it works. Please consult your financial planner or CPA for the best answer in your situation.  If you need a recommendation, please contact me.

To begin your understanding, here is a simplified calculation of how the capital gains is figured out for a property sale.  Several variables work into this calculation:

1. Sale price 
2. Current Tax Basis
3. Home improvements made, not maintenance 
4. If you own the property as a married couple or single person ($500k/$250K tax exemption)
5. Your income level/tax bracket which includes your home sale profits

Read more about selling your home in the IRS Publication 523, "Selling Your Home"
Read about capital gains and the different tax rates
If an original owner of the home is now deceased, please consult the Step-up Basis page to see if you can benefit from this tax law.