Home Sale Capital Gains Tax Calculator

Step 1 — Compute the gain. Amount realized = sale price − selling costs. Adjusted basis = purchase price + acquisition costs + capital improvements − depreciation allowed or allowable (even if you never claimed it). Total gain = realized − basis.

Step 2 — Apply §121. Full $250K / $500K exclusion only if you owned AND used the home ≥24 of the last 60 months AND didn't use §121 in the prior 2 years. Otherwise a prorated cap = full cap × min(months owned, months used) / 24 — and ONLY if the sale was for a qualifying reason (job change ≥50 mi, health, unforeseen circumstance). Married filing jointly, the $500K needs both spouses' use and neither spouse's recent prior exclusion; otherwise each spouse's own limit is figured separately and added. No exclusion within 5 years of acquiring the home in a 1031 exchange. If the home was not your main home for a period after 2008 before you last lived there, the share of the gain (other than depreciation) for that nonqualified use can't be excluded (§121(b)(5)).

Step 3 — Depreciation recapture. Depreciation allowed or allowable after May 6, 1997 (whether or not you claimed it) becomes unrecaptured §1250 gain, taxed at your marginal ordinary rate capped at 25%. It's never excludable under §121.

Step 4 — LTCG + NIIT. Your other income minus your deduction is your taxable income before the sale; the taxable long-term gain is stacked on top of it and taxed at 0 / 15 / 20% per the year-aware brackets. A home held 1 year or less produces short-term gain instead, taxed as ordinary income at your regular rates. NIIT of 3.8% applies to the lesser of net investment income or MAGI (your AGI, the taxable gain included) over $200K single / $250K MFJ (thresholds are also NOT inflation-indexed).