Home-Sale Capital-Gains Exclusion Quiz (Sec. 121)

Up to $250K single or $500K married filing jointly, if you qualify. After years of appreciation that can shelter a large chunk of your gain — but eligibility has specific tests, so confirm with your CPA before planning a sale around it.

Owning and using the home as your primary residence for at least two of the last five years (both spouses must meet the use test for the full $500K). It's the gate most sales hinge on — verify your timeline against it.

Generally not within two years of a prior use — that can disqualify you. If you've excluded gain on another home recently, the timing matters, so check the last-two-years rule before counting on it again.

Yes. Non-qualified (rental) use can reduce the excludable amount, and depreciation taken during a rental period is recaptured. If the home was ever a rental, that's a flag for your CPA to size the real exclusion.

The excess is taxable capital gain, which is where planning matters — timing, basis from improvements, and coordination with other moves. On a large gain above the cap, the CPA conversation is about minimizing the taxable remainder.

Confirm the two-of-five-year test and any rental reduction with your CPA, then coordinate the sale timing to protect the gain. That coordination is part of a Real Estate Review.