1. Your year
2. The home
3. Ownership and use
Fill in the boxes above, then click Calculate my tax.
Result
The numbers
| Line | Amount |
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How it is calculated
Tax year 2026, federal only. Gain is the sale price minus selling costs, purchase price and capital improvements, plus any depreciation claimed (which lowered your basis). The exclusion is $250,000 ($500,000 married filing jointly or surviving spouse) when you owned and used the home for at least 24 months and did not use the exclusion on another home in the last two years; a partial exclusion, prorated by the shorter of months owned and months used out of 24, applies with a qualifying reason. Depreciation is never excludable and is taxed at your ordinary rate capped at 25%. Time after 2008 as a non-main home is allocated out of the exclusion by months. The taxable rest is long-term capital gain stacked on your other income after the standard deduction (single $16,100, married $32,200, head of household $24,150), at 0% up to taxable income of $49,450 single, $98,900 married, $66,200 head of household, then 15% up to $545,500, $613,700 and $579,600, then 20%, plus the 3.8% net investment income tax above $200,000 single or $250,000 married of income. The break-even price and the wait-and-save figure are found by search and re-running the same model.
Not modelled: state tax, other gains and losses, suspensions of the five-year window (military, foreign service), homes with business use beyond depreciation, divorce and death special cases, other years. Unverified: checked by hand calculation and unit tests, not against IRS Publication 523 worksheets. Check the 2026 parameters against the IRS's own publications before relying on them.
Common questions
How much of my home sale profit is tax-free?
If you owned and lived in the home as your main home for at least two of the last five years, up to $250,000 of gain is tax-free, or $500,000 for married couples filing jointly where both spouses meet the use test. Gain above that is long-term capital gain.
What is the two-out-of-five-year rule?
You must have owned the home for at least 24 months and used it as your main home for at least 24 months in the five years before the sale. The months do not need to be consecutive, and the two tests can be met at different times.
Can I get part of the exclusion if I sell before two years?
Yes, if you sell because of a work move, a health reason or certain unforeseen events. The exclusion is prorated by the months you met the tests out of 24. Without one of those reasons, selling early means no exclusion at all.
Is depreciation from a home office or rental taxed?
Yes. Depreciation claimed after May 6, 1997 is never covered by the exclusion. It is taxed at your ordinary rate, capped at 25%, even when the rest of your gain is tax-free.
What if the home was a rental before I moved in?
Time after 2008 when the home was not your main home, before it became one, is allocated out of the exclusion by months. That share of the gain is taxable even if you meet the two-year tests.
Do selling costs and improvements reduce the gain?
Yes. Gain is the sale price minus selling costs such as commissions and closing fees, minus your purchase price and documented capital improvements like a new roof or an addition. Ordinary repairs do not count.
Is the 3.8% net investment income tax owed on a home sale?
Only on taxable gain above the exclusion, and only when your income including that gain passes $200,000 single or $250,000 married filing jointly. The tax-free part is not subject to it.
What does this tool leave out?
State tax, the once-every-two-years rule for anything beyond a yes-or-no answer, military and other suspensions of the five-year window, homes with a business use area other than depreciation, divorce and death special cases beyond the surviving-spouse option, and years other than 2026. Check the 2026 parameters against IRS Publication 523.
Is my information uploaded anywhere?
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