US Home Sale Capital Gains Tax 2026: $250K & $500K
US Capital Gains Tax on Selling Your Home in 2026: How the $250,000 and $500,000 Exclusions Work United States | October 25, 2026 A homeowner buys a house for $350,000. After several years of living there, the property is worth $650,000. The homeowner decides to sell. Does the Internal Revenue Service tax the entire $650,000 selling price? Does the person owe tax on the $300,000 increase in property value? Can selling expenses and improvements reduce the gain? And how much tax could a married couple save? For eligible homeowners, federal tax law offers an important benefit. Under Internal Revenue Code Section 121, a qualifying individual may exclude up to $250,000 of gain from selling a principal residence. Qualifying married couples filing jointly may exclude up to $500,000. These amounts remain the published federal limits as of October 25, 2026. The exclusion is valuable, but it is not automatic for every residential property. The homeowner normally must satisfy ownership and reside...