The Home Sale Exclusion Is One of the Largest Tax Breaks Available

Live in your primary residence for at least two of the last five years to exclude up to $250,000 ($500,000 for married couples) of capital gains from tax when selling. Keep records of capital improvements to increase your cost basis and reduce taxable gain. The exclusion applies only to primary residences, not second homes or rentals. Ownership and residency periods must total two years but need not overlap or be consecutive. Partial exclusions may apply for early sales.