Selling Your Home
Do I have to pay capital gains tax when I sell my home?
By Steve Lockhart
The short answer
The federal exclusion is the reason most people pay nothing when they sell their primary home. Own and live in the home at least two of the last five years, and you can exclude up to $250,000 of gain, or up to $500,000 for married filing jointly, from federal tax.
Full answer
The federal exclusion is the reason most people pay nothing when they sell their primary home. Own and live in the home at least two of the last five years, and you can exclude up to $250,000 of gain, or up to $500,000 for married filing jointly, from federal tax. For most long-term owners, the gain stays under that cover and nothing is owed. Tax appears only when your gain exceeds the exclusion or your ownership falls short of the rule. Nevada collects no state income tax, so there is no state-level tax on the sale here, which makes a Las Vegas sale a federal-only question. The details matter in the exceptions: partial exclusions for some sales re-qualifying moves or a health reason, and the way rental, a second home, or business use changes your numbers. I am not a tax professional. What I can do is frame the decision, estimate the proceeds, and help you bring the right questions to your CPA.
Go a little deeper
Frequently asked
Questions sellers often follow up on
What counts as my basis in the home?
Basis is generally what you paid plus the costs to buy plus certain substantial improvements you made, and minus anything the law requires. The higher your basis, the smaller the taxable gain. Your CPA runs the exact number.
Do I have to buy another house to avoid the tax?
No. The old rollover rule is gone. Most sellers simply use the exclusion when they qualify and then do whatever they want with the proceeds. There is no legal requirement to reinvest to keep the gain excluded on a primary home.
I am selling because of a move or health reasons. Do special rules apply?
A partial exclusion can help when you sell before two years because of a change in work, a health reason, or another event covered by the rules. The details matter here, and a tax professional is the right one to confirm your situation.
The Lockhart Method
The Lockhart Method
Your Home | My Strategy | Proven Results
My strategy: handle the sale math with you while framing what the tax professional will need to confirm. We know the likely gain, flag the exceptions, and bring open questions to a CPA so tax never waits to appear after closing.
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